Life insurance is mandatory for your family’s financial security. However, in today’s financial climate, it’s smart to reduce budget expenditures whenever you can. If you want to reduce the amount of money you spend on life insurance, consider the following points.
1. Avoid purchasing a guarantee issue life insurance policy. Guaranteed issue life insurance policies tend to be quite pricey and with good reason. Companies who sell such policies guarantee that they will issue anyone a life insurance policy, including people who suffer from physical conditions that would not typically be accepted by life insurance companies.
* So, if you’re in good health, it’s less expensive to find a regular life insurance policy.
* However, a guarantee issue life insurance policy might be the wisest choice for you if you’re not in good health.
2. If you smoke, quit. Underwriters raise the price of insurance by 25%-50% for tobacco users.
* When you quit smoking and have gone 12 months without using tobacco, you can request that the insurance company remove the extra rating. Doing so will reduce your premiums.
3. Shop around. Each company underwrites health concerns differently. For example, well-controlled high blood pressure might not even warrant an extra charge with some companies, while other companies will rate up the policy.
* When comparing rates, ensure you provide the same health information to each company so the estimates will reflect your true health condition and can be more easily compared in terms of price.
4. Strive for your ideal weight. When shopping for insurance, it can save you money if you’re at an average weight for your age and sex.
* Each insurance company will rate additional weight differently. After a certain amount of weight, extra pounds will raise the cost of your insurance.
* If you’re overweight, ask your agent to show you the rating chart. If you’re close to a border weight between categories, you may be able to reduce your price by losing only a couple of pounds before you’re weighed by the company representative.
5. Cost isn’t everything. Lower priced policies can actually become more expensive. Companies with an A.M. Best rating of A+ or better may charge more, but those extra costs pay off over the long haul. Here’s why:
* If you go with an insurance company because it charges less and it goes out of business, then you have no insurance at all. So, even though you’ve been paying for insurance, you could actually lose your coverage and all the money you paid if you seek coverage from a risky company.
* In the event that a significant amount of time has passed since you’ve purchased a policy from a company that goes out of business, your health may have changed enough to make getting another policy difficult.
* So, the lesson here is to check out your life insurance company’s ratings in advance of purchasing your policy as one way of ultimately conserving your funds.
These are some of the most common strategies that can reduce your costs when you purchase life insurance. If you practice good health habits, shop around, and do business with a reputable life insurance company, you can secure a life insurance policy that both saves you money and provides for your family’s needs in the future.