While not mandated by law like other types of insurance, life insurance is something that anyone with dependents needs to have. Some people want to get it, but fear it's too expensive. Here are seven tips to help you get the most savings on your insurance policy:
Review Your Coverage Amounts
It's a good idea to have a policy that pays out eight to ten times the amount of your annual income. If you're considering between a $500,000 and $1 million policy, ask what the rates are. You might be able to get double the coverage for a small amount more. Alternatively, if you're single and have no kids, a policy that's just five times your income might be a better fit for your budget and needs.
Choose Term Life Insurance
Term life insurance is cheaper than whole life insurance policies because it's only valid for the length of the term. Usually term lengths are 10, 15, or 20 years. The general idea is that, if you're 30 now, after 20 years, your kids will be grown and your partner will have less need for extra money in the event of your passing.
Determine How Long You Need The Policy
For a 40-year old with college age kids, a ten-year policy is probably sufficient. The money you save by not paying on it for an extra 10 or 15 years will add up. But if you're in your 20s and expecting to start a family soon, opt for a 20 or 30-year policy.
Get In Shape
A healthy person can get more coverage for less money than their peer who is overweight. Start by making it a goal to lose 10 percent of your body weight and call your insurance provider to see if you can get a lower rate after losing the weight. Eating well will also help keep your blood pressure and sugar levels low, reducing your risk of illness.
Eliminate Bad Habits
Regular smokers are hit with some of the highest premiums, due to the number of health issues smoking causes. Cut out smoking and reduce your amount of alcohol consumption to get preferred rates.
Avoid Unnecessary Riders
There may be add-ons to your policy (or “riders”), which offer additional coverage for a fee. Go through them and decide if they're beneficial to you or not. If not, drop them.
Insurance companies offer small discounts for paying upfront each year, rather than being on a monthly or quarterly billing cycle. This reduces their costs, so they pass along some savings.
As always, don't forget to shop around and compare rates. Contact us today to learn how we can help you.