Insurance is designed to help protect your wallet against unexpected life events. Health insurance helps cover the costs of illnesses and injuries while auto insurance protects you and your vehicle if you are in an accident. Aside from this, many other types of insurance policies are available to help mitigate financial losses from various life events. One type of coverage that many experts suggest for most families is life insurance. A life insurance policy can protect spouses and other dependents from financial burdens as a result of an unexpected death.
Life insurance policies guarantee that a death benefit is paid to designated beneficiaries if the policyholder passes away. The death benefit is a lump sum payment that can cover funeral expenses, pay off debts, take care of other financial obligations, or serve as supplemental income. Most financial experts agree that you should purchase a life insurance policy worth around 10 times your annual income. Depending on your financial situation and your family, you might need a specific amount of insurance.
When life insurance companies offer policies and rates, they consider certain risk factors for each policyholder. Your age, gender, medical history, and lifestyle choices will impact your rates and policy options. As a result, you might find that certain life insurance policies come with significant premium rates. No matter if you are looking for a 30 year term life insurance policy or a permanent whole life policy, there are ways that you can save money. Let’s look at some ways to reduce your life insurance premiums.
Opt for term life insurance.
If you are considering life insurance, you will need to carefully think about what type of policy you need. In general, you can purchase a term life insurance policy or permanent coverage. A permanent policy might be offered in the form of whole life or universal life insurance. These policies offer coverage for the duration of your life as long as you continue to make premium payments. These policies also come with a savings component that will allow you to withdraw or borrow against the value of your policy later on. As a result, permanent life insurance policies tend to be more expensive.
If you are looking to save money, you might opt for a term life insurance policy. As the name suggests, these policies expire after a certain term of 10, 20, or 30 years. A term life policy is pretty straightforward with no cash value component. Once these policies expire, you will be without coverage. Term life insurance can be significantly less expensive than permanent coverage. Although you won’t have long-term coverage, these policies usually work well for most people, as they offer protection during the years when there is a mortgage and dependent children.
Change your lifestyle.
As discussed, several factors impact your life insurance premium rates. Many of these things, such as your age and medical condition, are out of your control. However, you can control your lifestyle choices, such as smoking. A recent study found that smokers and tobacco users experience a 342 percent premium increase for life insurance due to the associated health risks. If you are interested in lower insurance premiums, it might be worth quitting smoking and making healthier choices.
The best way to get the right life insurance policy for the most affordable rates is to shop around. Using an insurance comparison service to browse quotes from several insurers will help you find the best rates. Even if you are in a higher-risk situation, you can still find the best options by shopping around for multiple quotes.
In general, it is best to purchase life insurance when you are younger and healthier. Aside from this, however, you can comparison shop for quotes, reduce your risk factors, and opt for shorter-term insurance to help save money on your premiums.