Shopping for Life Insurance: 10 Ways to Save Some Cash

umbrella protecting family

Over 40 percent of Americans don’t have any form of life insurance. 

It’s really good news that you’ve decided to buy this type of coverage. It means that your family is provided for when you’re not around anymore.

But shopping for life insurance is exhausting and boring. Plus, you need to be careful about what you buy – after all, you don’t want to overpay for your policy.

All you need to do is to follow our tips for saving money when shopping for life insurance. Let’s go!

1. Browse around for Life Insurance

You should definitely avoid buying the first life insurance policy that comes along.

If you want to be a savvy shopper, you need to browse around for the right policy. 

If you’re struggling, check out a price comparison website. This allows you to compare different deals and premiums from multiple providers. 

2. The Right Policy for You

Determine whether you want a full life insurance policy or term insurance. 

Term insurance lasts up to an agreed period of time, whereas whole life insurance covers you until your death. Therefore, term life insurance is much cheaper. 

3. The Right Term for You

If you prefer term life insurance, you need to make a decision about how long the term should be.

Remember, the longer your policy covers you, the more expensive it’s going to be. 

Also, decide what you expect from the insurance policy. 

Do you only want your policy while your kids are young? Then, you probably only need a short-term plan. 

4. The Right Amount to Pay

Before you purchase life insurance, it’s important to understand that the bigger the payout you want, the higher your premiums will be. 

Many customers make the mistake of taking out a policy that offers more coverage than necessary. For example, let’s say you think that a payout in the case of your death worth $200,000 is sufficient. Then, don’t take out a policy worth $800,000. 

5. The Earlier You Buy It, the Better

The older you are, the more expensive life insurance costs. 

That makes perfect sense. The insurance company makes a judgment about how long you’re going to live based on the information you provide about yourself. 

The longer you’re expected to live, the lower the chance the insurance company is going to pay out.

According to one insurance company, the average age of customers taking out life insurance plans is 56 years old.

You need to be thinking about life insurance at a much younger age – even in your 20s.

Despite this, it’s important to be aware that seniors over 70 can still get good value life insurance. 

6. Live a Healthy Lifestyle

Insurance companies determine your premiums based largely on your lifestyle.

If you generally lead a healthy lifestyle, then your premiums are going to be lower than if you’re unhealthy. Makes sense, right?

You need to be doing exercise and physical activity on a regular basis. Quit smoking if you haven’t already done that. Reducing your alcohol consumption would also be recommended. 

If you want to save money on your life insurance, one of the most effective ways is to start living a healthy lifestyle now.

7. Consider a Joint Life Insurance Policy

Are you currently married or cohabiting with your partner?

You could save a lot of money on your life insurance plan by taking out a policy as a couple.

That’s because the plan would work on the basis of paying out to the first person to die in the partnership. Therefore, rather than taking out life insurance independently of each other, you pay for it together.

However, remember the rule about the earlier, the better.

If the widowed party also wants to take out an insurance policy after the joint plan has paid out, this could be more expensive.

8. Read the Small Print

It’s common for insurance companies to include add-ons in their plans, which allows them to increase the amount they charge in premiums.

This may not always be made absolutely clear to the customer. Therefore, it’s important that you know what you’re doing before you sign up.

However, don’t reject any add-ons. Some may be beneficial depending on your specific circumstances. 

9. Reduce Taxable Payments

Your life insurance is not subject to income tax. However, inheritance tax still applies.

Therefore, you need to make sure your insurance policy is in a trust. This allows you to avoid such problems. 

10. Do You Need Life Insurance at All?

You need to think carefully about whether or not you want to pay for life insurance. There are many important benefits to gain from taking out such a policy.

However, it’s certainly not a necessity for everyone.

Let’s say your employer has included a claim for death in service in your employment contract.

This means that your dependents would receive a payout if you died during your service at work. You may decide that due to this, it’s not necessary to take out additional life insurance.

By contrast, if you’re a single mother with a number of dependents, there are many reasons why life insurance could be essential for you. 

Shopping for Life Insurance

Shopping for life insurance is never fun. But sometimes, it has to be done.

You don’t want to spend more on premiums than you need to. By following our 10 money saving tips, you could reduce your rates significantly.

For more personal finance and budgeting tips, be sure to check out our other blog posts.

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