7 tips for saving on your life insurance
You want life insurance. But you still want enough money left over so you can go out to a restaurant now and again. That’s perfectly understandable! Here are a few tips on how to lower your life insurance costs.
Don’t forget that how much you pay is determined when you’re approved. It’s like a telephone service agreement: once you’ve signed on the dotted line, the price stays the same for the entire term.
Tip 1 – Don’t smoke or else stop smoking
This is the tip that will save you the most money. The cost of insurance can be twice as high for a smoker compared to a non-smoker or a former smoker.
Are you a smoker? You can still save money! Some companies agree to lower the insurance premium for a smoker who has stopped smoking for 12 months or more.
If you’re a smoker when you buy a life insurance policy, then by all means don’t conceal this fact from the insurance company, as it may refuse to pay out on your insurance policy if you were to die.
Tip 2 – Shop around
It’s absolutely essential that you shop around to get the best insurance coverage for your money and for your personal needs.
For example, let’s compare two insurance policies:
When coverage ends, policy #1 will have cost $950 less than policy #2. Imagine what you could do with the savings! #newcouch #tripsouth
When you shop around for your insurance policy, there’s no point speaking to several different insurance brokers because the cost of the same insurance product will be identical no matter which broker. However, make sure you deal with an independent broker (like us!), not a broker affiliated with a particular insurance company.
Tip 3 – Purchase your insurance policy at a young age
Statistics prove that the younger you are, the less likely you are to die. That’s why insurance is less expensive for a 20-year-old than it is for a 40-year-old. Use the statistics to your advantage and save money on your insurance costs!
For example, $300,000 of coverage for a term of 20 years will cost you slightly more than $20 a month if you buy it when you’re 20 years old. The same insurance coverage will cost you more than $30 if you buy it when you’re 35 and more than $60 a month at age 45.
Tip 4 – Adopt a healthy lifestyle
The healthier you are, the less your insurance policy will cost you! Once again, it’s all about statistics: healthy people have a longer life expectancy. That’s why your health and family history influence the cost of insurance.
Your lifestyle will also affect the premium you pay. For example, if your favourite sport is skydiving, your insurance policy may cost you more compared to a person whose main activity is walking.
Tip 5 – Buy term life insurance instead of permanent life insurance
If you’re looking for coverage that’s easy on your wallet, then include term insurance among your options. It’s significantly cheaper than permanent insurance. For example, a $75,000 permanent life insurance policy will cost the same each month as $500,000 of term insurance.
Term life insurance is a wise choice for providing your family with financial protection since it gives you a larger amount of coverage.
Tip 6 – Only buy the amount of insurance you actually need
You can save money by determining the amount of coverage that’s right for you. The difference in cost between $200,000 and $300,000 of coverage for the same term is only a few dollars each month, but after 20 years of monthly payments it adds up!
You don’t know how much insurance you really need? The amount of life insurance that your brother-in-law chose may not be the right amount for your family. Use our calculator to quickly get a good idea of how much coverage is right for you.
Tip 7– Pay for your insurance policy annually
This may be the last tip on the list, but it’s certainly the first one you’ll want to apply! There are two excellent reasons why:
- You could save up to 8% on the cost of your insurance policy by making annual payments.
- If you put aside one-twelfth of the cost of your insurance policy each month, then at the end of the year you’ll have earned the interest on that amount. Not only will you save money, but you’ll be richer for it!