Life insurance is one of those necessities that can cost us a lot of money. It’s essential to purchase life insurance if you have a family and dependents or have outstanding debt. The issue, though, is that life insurance policies can get expensive very quickly.
If there are ways to lower your monthly premiums, wouldn’t you want to know how? Here are 5 tips that will help reduce your premiums when you begin to compare life insurance policies.
You’ll never be younger than what you are right now, meaning now is when you should buy life insurance. One significant factor that influences the price of your monthly premiums is your age. Because the older you get, the more risk you are at passing from natural causes; the insurer will raise your premiums to cover their risk of paying your death benefit. So, buying insurance at the youngest age possible will ensure your rates stay low.
Get Your Health Under Control
Just like your age affects your premiums, so too does your health. If you’re a heavy smoker, drinker, have many health issues, overweight, or anything else that would contribute to poor health, you’re going to pay more for insurance.
Poor health puts you at risk for earlier death. Because of that, the insurance company will increase your premiums to cover their risk. Basically, the insurance company wants to have as little risk as possible of paying the death benefit. By getting your health under control though, there’s a good chance it will reduce your premiums.
Get the Minimum Amount You Need
It may seem like you need to have the highest policy you can find, but it will cost you a ton of money every month. If you’re looking to cut costs, get the minimum amount of life insurance you need for your current situation.
To determine how much you need, look at all the costs you and your family currently have, and compare that with the monthly income. If your family lost your income, how well would they be able to make ends meet?
Consider How Long You Need Your Policy
If you’re going with term life insurance, you can determine the length of coverage you want. The longer your term is, the longer you’ll be paying for premiums. You could go for smaller terms and renew your policy to reflect where your life is at.
The downfall to this is that your premiums will like increase a bit. Because when you renew your policy, you’ll be older, the premiums will reflect your current age and health upon renewal time.
When you’re looking to cut costs, you’ll want to shop around with different insurance companies. One insurer may offer the same insurance policy but at a much lower price. Use this to your advantage and see if the company you want can match and lower prices you may find.
Although it may require a bit of extra work, there are ways you can easily reduce how much you pay for your life insurance.
Guest Author Bio
Stephen Jacobson is a freelance writer for ModestMoney.com. In addition to writing about finance he also covers a wide variety of other topics.