How to Save Money When Buying Life Insurance

Check out these 9 tips for saving money when buying life insurance. By spending a little bit of time, you could save yourself a lot of money.

1. Get More Coverage At a Lower Cost

There are a lot of different types of life insurance out there. When you are looking at buying life insurance you should consider buying term life insurance. Most independent financial experts (including myself) consider term insurance to be the best life insurance product available. It offers the most coverage at the lowest cost.

2. Make Sure Your Insurance Policy Will Cover You For Long Enough

When you are shopping for term life insurance, you can buy coverage for anywhere from one year to 30 or more years. Make sure you buy coverage for long enough to cover your needs.

If you expect the kids to be grown up, the house paid off, and your savings to be built up in about 25 years, get a 25 year policy. If you get a 10 year policy, you will need to renew it in 10 years, and your premiums will go up due to an increase in your mortality risk. As you get older, there is greater risk that you will pass away. Insurance companies charge more for covering greater risk.

Buying one policy that spreads your risk out over a longer period and will save you money in the long run.

3. Shop Around

When you are buying life insurance, shop around for the best price. Online tools help make this process quick and easy. Filling in one form will get you multiple quotes to compare. If you live in the United States, check out Hometown Quotes. If you live in Canada, give Kanetix a try.

4. Buy Only What You Need

Use a life insurance calculator to figure out how much insurance you need. Most people are under insured which could make life hard for your loved ones if you pass away. But on the other hand, if you are buying life insurance you also do not want to spend money on more coverage than you need.

5. Check Out Price Breaks For Buying More Coverage

Often the price per thousand dollars of coverage will become cheaper at certain quantities. For example, it may be cheaper to buy $250,000 worth of coverage than $220,000. Based on how much insurance you need, check to see if you are close to the next price break.

6. Insure Multiple People Under One Policy

Most life insurance policies have an annual fee associated with them. This fee usually applies to each individual policy that is purchased. So if you buy a separate policy for yourself, your spouse, and your child, you will have to pay this annual fee three times each year.

However, most insurance companies allow you to insure yourself, your spouse, and your children all under one policy. This is done using something called a spouse rider and child rider. Using riders instead of buying multiple policies can save you quite a bit in annual fees.

7. Pay Annually If You Can

Most companies offer a discount if you pay your premiums on an annual basis instead of monthly. This is because it saves the insurance company the administration costs associated with monitoring your monthly payments.

8. Don't Buy a Guaranteed Policy If You're Healthy

Guaranteed policies cost more because there is more risk to the insurance company. They have no way of knowing if your ill or unhealthy and they charge you more to cover this risk. If you're healthy and you looking into buying life insurance, it's well worth the time to go through the medical checks. It can save you a lot of money on premiums.

9. Consider Making Lifestyle Changes If Necessary

Life insurance premiums are calculated based on certain risk factors. The more risk an insurance company sees that something could happen to you, the more money they will charge you. Smoking and being overweight can significantly increase your premiums. On the other hand, if you're at an ideal weight and are very healthy, you may qualify for preferred rates.

This concludes our nine tips for saving money when buying life insurance. I invite you to learn more about life insurance by checking out the related articles listed in the table below. Or you can check out our complete list of life insurance articles.

HOW TO GET THE BEST DEAL ON LIFE INSURANCE

Use our life insurance calculator to get an estimate of how much life insurance you need. Then get several quotes to compare from HometownQuotes. (Canadian? Use Kanetix instead)

Fill out one form and will get you several free personalized life insurance quotes. It saves you the hassle of having to shop around yourself to see who is offering the best product at the best price. Go to HometownQuotes now to get your free quotes today. (Canadian? Use Kanetix instead)

PS: Make sure you only buy term life insurance. Anything else and you're wasting your money!