Let’s face it: life insurance can be expensive. If you’re the primary breadwinner in your family, or if you have several dependents, you may need a fairly large life insurance policy to ensure your family’s comfort and your own peace of mind. But with a large policy may come some high premium payments.
The tips below can help lower your premium, resulting in lower payments and a more affordable life insurance policy.
- How To Lower Premiums on life Insurance
- Can You Negotiate Life Insurance Premiums
- When To Reduce Life Insurance
- What Would Cause an Increase in Insurance Premiums
- Can You Change Your Life Insurance Policy
- Stop Paying Life Insurance Premiums
1. Consider term insurance.
Many people automatically assume that they need permanent life insurance policies. Permanent policies are designed to cover the entire length of your life. The fact is that many people, even those with dependents, can get by just fine with term policies. Term policies are limited only to the time span you wish to pay on them. This results in lower premiums… and fewer of them.
Consider choosing a term policy only for the time of your life when your children are small. Once they are old enough to support themselves, they won’t need your life insurance as much and you will no longer need a policy, so permanent life insurance is not necessary.
2. Stay in good health.
Life insurance providers assess risk just as car insurance companies do. If you’re involved in many accidents, your car insurance will be higher. The same goes with life insurance. Don’t smoke- some insurance providers charge a smoker double the rate of a non-smoker. Get regular physical checkups to ensure you’re in good health. A clean record will lead to considerably lower premiums.
3. Start early.
The older you get, the more of a risk you are to life insurance providers, and hence the higher your premiums will be. An excellent time to get life insurance is when you are newly married or have just had your first child. You’re still young enough to be a decent health risk so the company will be willing to offer you a lower premium.
4. Consider talking to an insurance advisor.
An insurance advisor can negotiate with life insurance providers in a way that you may not be able to. They can also take into account every single aspect of your policy needs, and shop the market much more quickly and efficiently than you could do alone. The one-time cost of meeting with a good advisor to locate the best policy for you is well worth the payoff in the long run.
5. Shop, shop, shop.
If you’re searching for a policy without the help of an advisor, you should be prepared to shop the market aggressively. Rates differ widely between companies, and one company that finds you a risky investment may see things very differently from their competition. Life insurance is important; invest some time into finding the best deal possible.
6. Don’t worry about riders.
Riders are special additions to the policy that are designed to pay out more in the event of certain circumstances. The most well known example is the accidental death clause, which pays double the amount if the insured dies accidentally.
For the most part, riders are completely unnecessary and usually extremely expensive. Make sure your original policy includes enough value to cover your family’s needs, and don’t worry about padding the policy with riders.
7. Watch out for special fees.
Read the fine print on your policy. Often, making monthly payments instead of paying your premium in one lump sum each year can add several dollars’ worth of “processing fees” and make your payments higher. There are often small fees and charges associated with your premium that can jack up your payment without you even realizing it.
If you don’t agree with all the fees, ask your provider for an explanation. If they don’t have one, find a new provider (see item #10).
8. Check up on calculations.
When assessing the rates of a provider, do an estimate based on a multiple of $1,000. Often after a certain amount, the rates per $1,000 will drop, and getting $300,000 worth of coverage may even cost you less than getting $275,000. See how your particular company calculates coverage to get the best deal.
9. Don’t buy more than you need.
It is estimated that a huge percentage of Americans carrying life insurance are carrying far larger policies than they need to be. Pushy insurance salesmen have done their job, and many people are scared into purchasing huge amounts of insurance that they don’t need.
Calculate your income, your spouse’s income, and any outstanding debts in order to determine how much you need. It is very helpful to meet with a non-biased insurance advisor to figure out what size policy you need. Don’t let the provider make the decision for you.
10. Find a provider you can work with.
Your life insurance is important, and if you’re not comfortable with your provider then you won’t be able to stand up for yourself when it comes to your rates.
If you get into a situation where your payment must be late, or where you think you’re being charged unnecessary fees, you absolutely must be able to talk through it with your provider. If you can’t do that, you’re almost guaranteed to suffer some unnecessarily high payments that could have been avoided by working with the company. Remember- it’s your life insurance. Who provides it IS important.