Things That Make Life Insurance Affordable

Many people are looking to trim expenses during these uncertain times. Perhaps life insurance is one area where you’re looking to economize. If so, the good news is that there are quite a few ways to get affordable life insurance.

Before sharing our best affordable life insurance tips, know that it’s never a good idea to skip buying life insurance altogether. Doing so could put your loved ones in a major bind if you and your earnings were no longer in the picture.

If you’re among those who think this way, you might be surprised how affordable life insurance can be. In fact, you can get cheap life insurance if you take the right steps when shopping and applying for a policy.

Ways To Make Your Life Insurance Affordable

• Buy a Term Life Insurance Policy

You have two main options when it comes to buying life insurance: term life insurance and permanent life insurance. A term policy will provide coverage for a certain period of time, such as 10, 20 or 30 years. Two companies—Banner Life and Protective Life—offer 40-year term life policies. A permanent policy, on the other hand, will provide lifelong coverage. A term life policy can provide cheap life insurance for a period when you need it most, such as the term of your mortgage or until your kids graduate from college. Plus, most term life policies offer the option to convert to a permanent life policy. It’s a way to switch to lifelong coverage down the road, especially if you develop health conditions that would make it difficult to buy a new life insurance policy.

• Buy Sooner Rather Than Later

Your age and health are two key factors that insurers consider when determining the rate you’ll pay for life insurance. The younger and healthier you are, the less you’ll pay for coverage. So if you want to get cheap life insurance, buy sooner rather than later. You will lock in cheap life insurance for the term length of your policy.

Don’t make the mistake of thinking you have time to make more room in your budget or get in better health before buying a policy. The cost of coverage will only go up each year you wait to apply. Plus, you risk developing more health issues as you age. 

• Create a Ladder of Term Policies to Get More Coverage for Less

One of the factors that influences how much you pay for life insurance is the amount of coverage you buy. The larger the face amount, the higher the premium. To be clear, you don’t want to skimp on coverage just to save money. You need enough life insurance to protect those who depend on you for financial support.

Once you know how much life insurance you need, you can keep down the cost of coverage by using a strategy called laddering. It can allow you to have more coverage initially—perhaps when your children are young or when you owe more on a mortgage—then taper off with time as your life insurance needs decrease.

• Avoid Unnecessary Riders

When you buy a life insurance policy, you typically have the option to get additional features called riders. You can add life insurance riders that allow you to waive premium payments if you become disabled, to add coverage for your children, and the list goes on. Although the extra coverage might be appealing, you can get cheaper life insurance by avoiding riders you don’t necessarily need.

• Avoid Simplified Issue Life Insurance

Traditionally, if you wanted to get a life insurance policy, you had to get a medical exam. However, it is possible to skip the medical exam with certain types of life insurance policies. One is called simplified issue life insurance. This type of policy might seem ideal because it usually requires only filling out an online application with a handful of questions about your health and lifestyle and getting approved (or denied) for coverage within a matter of minutes.

However, if you’re healthy, a simplified issue policy can cost twice as much as a policy that requires more thorough underwriting—the process insurers use to gather information about applicants. These policies cost more because insurers take on more risk when they have limited information about applicants.

• Shop Around

It’s easy to get life insurance quotes, and quotes are free. Don’t settle for the first quote you get. For starters, life insurance quotes you see online are often for the lowest available rate, Voegele says. However, only a small percentage of applicants actually meet the criteria to qualify for the best rate. Many people discover that their final quote is higher after the application process. It’s also smart to shop around because life insurance rates can vary greatly from company to company.

Conclusion

If you want to take a do-it-yourself approach, get quotes from several insurers. Otherwise, work with an independent insurance broker who works with several companies and will know which one is likely to give you the best rate based on your health and age.

Also read: 

How To Secure Your Future With Whole Life Insurance Policy?

Is It Possible To Purchase More Than 1 Term Insurance Plan?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.