What if the Worst Happens?
If you’ve previously thought of life insurance as a somewhat unnecessary luxury, you might want to think again. You may feel that you are young, fit and healthy and that you can take good care of yourself and your dependents, but have you really thought about what might happen if you were no longer around? Would your family face the burden of coping with unexpected financial hardship?
Ways to Save Money on Life Insurance
Coping with the unexpected is difficult enough without having to worry about money. So, if you haven’t previously given much thought to the distressing possibility that your family may struggle to live without your salary, then life insurance is definitely something to think about.
The following tips have been designed to help you get the best possible deal from a life insurance policy, and to save you money in the process:
1. Improve Your Health
Health issues make it difficult to buy life insurance. Conditions like high blood pressure, cholesterol and diabetes can see you paying well over the odds for a policy. Aim to start improving your health as soon as you can. You could qualify for a reduction in premiums if you can show an improvement.
2. Give Up Smoking
There’s no escaping high premiums if you’re a smoker. Insurers will consider you a poor risk as you’re more likely to die earlier. Some insurers may also request proof that you’re not a smoker prior to providing you with insurance. It’s worth noting that if you can prove you’ve been nicotine free for a certain amount of time, you may be entitled to lower premiums, but this will be at the discretion of individual insurance companies.
3. Buy Life Insurance Before You Think You Need It
It’s a fact that the earlier you buy life insurance, the cheaper it will be. Most people decide to buy once they start a family, or if they find themselves in the position of having any type of dependent. Either way, buying life insurance sooner rather than later will save you money.
4. Could You Benefit From a Decreasing Term Policy?
Debts such as a repayment mortgage reduce over time. A decreasing term policy’s premiums will therefore be cheaper than those for a level term policy as the debt decreases over time.
5. Get Savvy About Discounts
Some insurance companies will offer discounts if you buy online, whilst others may offer discounts for having more than one type of insurance with them. If you have some good policies in place already, check out what discounts your existing insurers are offering for buying your life insurance from them.
6. Don’t Be Tempted by Unnecessary Extras
Think about how much money it will take to maintain your family’s lifestyle in your absence. Mortgage payments and university tuition fees should also be factored into your policy cover. If you’re a person of fairly modest assets, you won’t need to pay for a ridiculously high liability ceiling.
7. Pay for Your Policy in One Annual Lump Sum
Not everyone can afford to do this, but if you can, it’s worth considering. The administration costs involved in collecting premiums will be reflected in your payments, whereas buying your policy outright and on a yearly basis removes the administrative costs and saves you money overall.
8. Use a Comparison Website
Probably one of the best tools you have to hand when looking to buy life insurance, particularly if you have a range of different requirements, price comparison websites will take the hard work out of searching by showing you the companies that offer the cover you are looking for, and omitting the rest.
9. Take a Re-Evaluation
Did you know that it’s possible to save money even after you’ve purchased your life insurance? If you can show that you’ve overcome a health issue that’s bumped up the cost of your life insurance, and sustained the improvement in your health for at least six months, you could find yourself paying less for your insurance premiums.
10. You Get What You Pay For
Don’t be tempted to go overboard on finding the absolutely cheapest policy; it usually ends up as a false economy and the nature of having good life insurance in place is to take away some of the worry and stress in times of crisis. A policy that lacks the cover that’s needed will cause a lot of anxiety to loved ones dealing with the crisis, and simply isn’t worth the meager saving. Work out what you need from your policy before you narrow down the best deals.
Living a More Contented Life
In the same way that other insurances give you peace of mind about different areas of your life, a life insurance policy can relieve much of the anxiety of worrying about the future. Knowing your family are taken care of financially in the event of your death will leave you free to enjoy life with your family with one less thing to worry about.
About the Author:
This guest post was produced by Ed, who writes for the financial comparison website www.expertsinmoney.com. Experts in Money provide a wealth of information on a number of personal finance products as well as a free comparison service for PMI and life insurance quotes.