As a smart consumer, you'll want to spend your money on products that are right for you and, of course, maximize your costs - life insurance is no exception.
There are many personal factors that affect the cost of life insurance , some of which may not be in your control, but rest assured that you can still be proactive with your wallet. For example, even if you don't know much about your family's medical history , you CAN maintain a healthy lifestyle to reduce your life insurance costs.
Likewise, buying insurance early can save you significant amounts of money. Continue reading to learn money saving tips when buying life insurance at this article, you will be surprised at how much you save in the future!
Buy life insurance when you are young
Your date of birth is the biggest factor affecting your premium rate. The younger you are, the healthier you are predicted by life expectancy. As a result, you will have to pay lower life insurance premiums because your chances of dying are lower.
Both term and whole life insurance offer premiums at a fixed rate, for the life of the policy. However, since a term insurance policy comes with an expiration date, you will have to periodically renew it to maintain coverage. At each contract renewal, you'll see an increase in fees based on your age at the time.
Do not smoke
If there's one thing the insurance company doesn't want, it's the early death of the policyholder. That's because they will have to pay before they can collect additional premiums.
As a result, insurance companies charge higher premiums for those most at risk of premature death. And few things increase the risk of premature death as significantly as smoking (according to the WTO, smokers die on average 5-8 years earlier than non-smokers).
So it's no surprise that smokers pay more for coverage. Specifically, smokers pay two to five times more for life insurance than non-smokers.
Create positive habits, not only because you are protecting the most precious thing, your health, but also save significant money when participating in life insurance. You're likely to get a lower quote a year after quitting, although the new fee still won't be as low as a non-smoker's rate. To qualify for that, you'll have to be smoke-free for three to five years.
Stay healthy
People in good health are naturally likely to live longer than those with health conditions, like diabetes or heart disease. Accordingly, when you maintain a healthy lifestyle and do not have any serious or chronic illnesses, you will pay less for insurance.
Get the right life insurance product
Life insurance is not a one-size-fits-all need. Before you apply for coverage, consider these three questions:
- Why do you need life insurance?
- How much insurance do you need?
- How much can you pay for life insurance?
There are two types of life insurance products - term life and permanent life.
Term life insurance:
Covers you for a limited time and is significantly cheaper than permanent life insurance. It can be an ideal solution if your financial needs have an end date. For example, if you want to be covered until your kids finish college, the mortgage is paid off, or you reach retirement age, you might want to buy term life insurance. Since term life insurance is cheaper, it can also make sense for those who want affordable coverage.
Whole life insurance:
As the name suggests, insurance for you for life. Many whole life policies also build cash value and are profitable as an investment instrument.
Because insurance lasts as long as it is more suitable for financial protection needs without a definite end date. For example, you may want to have life insurance if you want to leave an estate to your heirs. It can also be a good option for people who are dependent for life or who want to cover their end-of-life expenses.
Finally, individuals who want both protection and diversification can also benefit from purchasing permanent life insurance.
Compare prices
The best way to save money buying life insurance is to research the insurance companies in the market. No insurance company is the lowest cost provider of all. Some may offer younger participants a better contract, while others may be more cost-effective for those with health conditions.
So the only way to make sure you're spending the right amount is to get quotes from multiple insurance companies and compare them. Well, don't forget the great help from your advisors/insurance companies!
Cost is the biggest reason many people give not to buy life insurance. But in terms of long-term finances, it's a worthy expense. Invest in your insurance knowledge, consult an industry expert, and use these tips to save money when buying life insurance to make sure the amount you spend on life insurance will be what you spend. smart!
