One of the main deal-breakers when it comes to people getting life insurance policies is the price of premiums. It seems silly to spend large amounts of money for a service you hope to never want to use. And for some people, large premiums might simply not be affordable. But that’s not a reason to skip life insurance entirely.
That’s because the cost of life insurance policies is directly related to what amount of risk you pose to the insurance policy. And since your risk factor is a result of both the details of your policy and your health status, there are a variety of methods you can use to reduce how much you are going to pay in premiums. Here are some of how you can save money on life insurance.
1 – Compare prices
It’s easy to compare insurance prices using Insurance Hero and other similar tools. And comparing prices is worth your time because there can be quite a bit of price variation between insurance providers. These variations are often due to differences in the policies themselves — for example, policies that offer a generous amount of potential living benefits are bound to cost more to account for the added risk, all other factors being equal.
2 – Stay healthy
Comparing prices also lets you find out about the various types of specialist insurance policies out there. For example, if you have a rough medical history there are insurance policies that don’t require that you undergo a medical examination. The downside is that this type of policy often has higher premiums.
On the flip side, there are also policies made specifically for people who stick to a healthy lifestyle. These policies offer lower premiums on the condition that the insured person will continue to meet certain fitness targets throughout the policy.
If you are already into fitness or are willing to go through a challenge in lifestyle, these policies are a good way to pay lower premiums.
3 – Get it young
It’s no mystery that older people pay more for life insurance. In fact, getting a 30-year insurance policy in your 30s may cost as much as getting the same level of coverage for 20 years in your 40s. On top of that, the longer you wait to get life insurance, the higher the chances are that you’ll develop some medical condition that may make the price of your future premiums skyrocket.
That’s not an issue when you already own a policy, since then your premiums are already locked. And depending on the details of your policy, going through a major health event may even entitle you to a payout amounting to a portion of your total insurance policy.
4 – Limit your coverage
Experts often say that you should get your life insured for an amount totaling 5 years of your salary, but that’s just a rule of thumb. If you don’t want to pay high premiums, the simplest approach is to get insured for a small amount.
Of course, this means your family will get less money if something happens to you, but any payout is better than no payout at all. And if you have a hard cap for how much you are willing to pay for insurance, lowering the value of your policy and reducing your coverage can both help you hit that mark.