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Life Insurance: 7 Ways to Cut Costs

Posted by David Ross on Sat, Dec 15, 2012

Although we'll all die someday, when we do, we don't want to leave our loved ones with huge debts or financial problems. To ensure your family is financially secure in case you should pass away unexpectedly, you need life insurance. Like other financial products, it is important to get an insurance solution that provides the best value for your money.

Smart ways to reduce your life insurance costs. Serving Reading, PA, Berks County, Allentown, Philadelphia, Lancaster, Lebanon, York, Harrisburg, Pittsburgh, State College, Pennsylvania and beyond.An affordable policy can help you save money without straining your budget. Here are seven tips to help you pay less for insurance:

1. Determine the amount of life insurance you need

Check your finances and determine how much life insurance you need. Consider the expenses that your spouse and loved ones will have to bear should you pass away unexpectedly. Think about short-term expenses such as funeral expenses, buying food and paying rent, as well as long-term expenses such as college education costs.

Check the amount of savings you have and use life insurance to cover the difference between the savings and the total expected expenses of your loved ones.

2. Decide on the type of life insurance to apply for

You can apply for permanent or term life insurance. Permanent insurance offers protection for your whole life while term life insurance provides protection for a specified term. Term insurance will help you save on your payment cost. The insurance is cheaper than permanent insurance and is the better option in many situations. However, in some cases a whole life policy may work best for you, depending on your investment portfolio and strategy.

3. Shop around for the best rates

Insurance providers charge different rates. To get the best deal in the market, shop around and compare the offers of different providers. Look at both the cost of premiums you will pay and the coverage provided by each insurer. Use online insurance comparison websites to compare rates from different providers, but be sure to speak with a knowledgeable insurance agent before making a final decision. Remember, and independent agent is positioned to save you money because he or she represents many different insurers, and can select the best policy for your specific needs.

4. Check for hidden fees

As you shop around, be sure to understand all hidden fees. Some insurance companies charge fees every month instead of annually. Some policies also come with riders, or add-ons, that may not benefit you at all. Examples of add-ons that you should understand in terms of both cost and benefits before reaching a decision include:

  • Accident death benefit
  • Waiver of premium rider
  • Disability income rider
  • Accelerate death benefit

5. Make lifestyle changes

Staying healthy can significantly lower your insurance premiums. People with lifestyle diseases such as obesity and diabetes usually pay higher premiums. Before you apply for insurance, think about getting into shape, quitting smoking, and reducing alcohol consumption. If you already have purchased life insurance, you can renegotiate the payments when you start leading a healthier lifestyle.

6. Round up your payments

Most of the time, you will pay less for coverage that is rounded up into larger multiples. For example, a $500,000 policy may cost less than a $400,000 policy. Check with your insurance provider for the rate per $1000 of coverage, which usually goes down when a certain amount of coverage is achieved. The figure will help you determine the amount of benefits you will receive for the least amount of money.

7. Find an independent life insurance agent and the right insurance company

Some companies offer competitive rates for conditions such as cancer, heart disease and diabetes. These companies have underwriters who analyze the condition of insurance buyers on a case-by-case basis rather than setting a lump sum for buyers with a particular condition in one group. For example, if you have mild diabetes, you are likely to pay less than a person with chronic diabetes. An independent agent can help you compare such options from several companies, resulting in a better match between your needs and your policy.

Need help finding the right life insurance at the right price?

We can help. Contact us at 800-947-1270.

 

Learn more about how to save on life insurance in Pennsylvania and beyond

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