Everyone should have life insurance. The key question is “How much is enough?” To find an answer, you’ll have to do some planning, online research and serious soul-searching. One thing everyone should do is find the lowest rate for the kind of policy they want to buy to still be able to improve finances. Here are five tried and true methods for cutting your life insurance costs.
Buy Early and Pay Annually
The younger you are when you buy life insurance, the lower the cost. Buying while you’re still in your 20s or 30s is the most powerful method for getting a low-priced policy that offers all the bells and whistles you desire. But don’t be discourages, even “older” folks in their 40s, 50s and 60s can find policy bargains if they maintain their health and shop carefully.
Consider a Term Policy
There are many kinds of policies, but term insurance offers the lowest rates for simple coverage that most people are looking for. What’s more, you can buy as much or as little term coverage as you wish, in small increments. Agents sell more term policies than any other kind, and for good reason. Consumers who want the most bang for their life insurance buck opt for term policies.
Figure Out How Much You Need
Beware! There is no agreement among experts about exactly how much life insurance you should buy. An old, inaccurate rule was to purchase between two and five times as much as you earn per year. The problem with guidelines like those is that they can’t account for individual differences. You’ll need to carefully consider your particular lifestyle as well as personal preferences before deciding on a figure.
Are you single? Do you plan to ever get married and start a family? Do you just want to cover basic needs like funeral expenses or are you aiming to completely replace all of your income potential and then some? If you were to die today, how large of a policy would you want? Five years from now? Ten? Twenty? Sit down and make a list of your answers to these questions and any others that help you hone in on your life insurance needs.
Time has a way of changing our attitudes and needs, so don’t forget to reevaluate your situation at least once per year and whenever a major life event takes place. Life events include things like major job changes, deaths of family members, long-term illnesses, births, moving into a new house, buying or selling a business, and doing a re-set of your financial goals.
Do Your Own Online Research
Like so many other financial products, you can save a bundle by researching and shopping online. For example, LowestRates.ca does a good job breaking down the difference between term and permanent life insurance policies. Spend a few hours, at least, honing in on what the average rates are for people in your age and health categories.
Keep an Eye on Your Health
Face it, life insurance rates are based on your age, gender and health. Obviously, the one factor you have the most control over is the last. Quit unhealthy habits like smoking, excessive alcohol consumption and the use of any illegal substances. Visit a doctor and make sure your weight, cholesterol and blood pressure are in line for someone your age.