Most people cater to the idea that life insurance is costly. Whether they are right or wrong largely depends on what they understand by life insurance. To some, life insurance is an arrangement that brings in a sum of money to their heirs in the event of their death. To others, life insurance is a financial plan that also works as an investment. If you are in the first group of people, your idea of life insurance is grammatically precise in terms of finance. Good news for you is that your cost is not much and you can save on life insurance.
But if you belong to the second group—you can easily presume investment needs money in a big way.
Because life insurance products are not marketed with price tags, you may not have the idea of how pricing works in life insurance. You probably do not know that life insurance costs or premiums vary from one company to another from in a small to a big way.
In order for you to know how you can save on life insurance, you need to know these 7 tips some of which many are not telling you.
Find a Company that Counts Your Current Age
You will be surprised to know that life insurance companies count your age in two ways. Some companies count your current age as you approach to them for insurance. On the other hand, some companies count your nearest or next anniversary age while determining your insurance premiums.
Now, this can be a great factor in raising or lowering your life insurance cost. As mortality plays a key role behind the cost determination, how a company counts your age will affect your cost either positively or negatively. A rise of a year in your age will naturally raise your cost. So, if you want to save on life insurance, you need to know how your company determines your age.
You may wonder how you are to know. Well, perhaps you know life insurance is something that does not come without an agent. Ask the agent who you are talking to how their company deals with the age. Brochures of companies that are available online can also be of use. But this needs time and patience. So, it is the agent or brokerage agencies that you had better go to get the answer.
Get Quotes for Comparison Shopping
Quotes are projected costs that insurers provide to you on the basis of data that you provide to their software. Though the actual costs often vary when it comes through the underwriting process (the process that determines whether you can get signed up and what your cost should be), they can be a great way for you to save on life insurance. Some online life insurance quotes providers bring for you quotes from a number of the best rated companies and give you scope to know the companies that sell life insurance cheapest. Visiting one or more of them can be a great way for you to save on insurance.
Prepare Properly for Medical Exam
If you really want to save on life insurance, a no medical exam life insurance is a no-no for you. As insurers do not have a complete profile of you, they charge you higher costs in view of the prospects of your uncertain mortality. So, the best step for you will be to avoid going for a no medical exam life insurance.
But medical tests can be a cost-booster for you if you go through it unprepared. You need to make sure the test takes place when you are both physically and mentally alright.
Choose Licensed Agencies
You know life insurance comes to you through 3 channels – agents, agencies and direct company sales. Unless a company is already in your trust book, you had better avoid company agents. They prevent you from comparison-shop. The same thing happens when you want to buy direct from a company. You do not if there are cheaper choices for you from other insurers.
But you can go for agents who deal with multiple companies. They are better over the company-specific agents in that they allow you to choose from multiple companies. However, sometimes they may try to persuade you to purchase from a company that offer them better commissions.
This is why the best choice for you are the licensed brokerage agencies that deal with multiple and best-rated companies. They will be favorable for you because agents of such agencies are often salaried employees. (So, be sure to know if they are also commissioned agents or salaried employees.) If they are salaried employees, they will not personally benefit from pushing a company. As a result, they can be of help to provide you real help to save on insurance.
Avoid Insurance Beyond 65
Perhaps you have not forgotten that we are talking about ‘death benefit’ insurance which is known as term life insurance. Term insurance is often cheap beyond popular imagination. You need it for some particular years, often not beyond 65 by when your financial liabilities and responsibilities grow slim. Also, you have your pension and other benefits. So, whether you need life insurance beyond 65 or not can be a food for thought for you. Unless you need insurance beyond 65, having a policy beyond that age can be a way for you not to save on life insurance.
Avoid Multiple Policies
To save on life insurance, you should consider avoid buying multiple policies. While having life insurance on both spouses is not always a bad idea, having one is a great way to save. You can go for a first-to-die joint life insurance so that no matter who passes on, the benefit goes to the second spouse. This is a great way for you to save on insurance.
While buying life insurance, you will be offered some extra protection for some extra payments. Insurers call them riders. Unless you think there are practical reasons to buy any of the riders, you had better not go for any of them. They will raise the cost of your insurance.
While discussing the issue of how customers can save on life insurance, Life Insurance Mentors team decided not to mention two oft-mentioned tips: that you buy it at younger age and that you quit smoking. It is true that age is one of the influential factors (we have already mentioned this before) behind rise in customers’ life insurance costs, but no matter what their age is, our tips should be of use to all. We know you can not change your age if you are already late. We think the best time for you to buy life insurance is the when you feel you need it.
And, smoking surely greatly undermines saving on life insurance. But it is hypothetical to ask you to quit smoking if you have been a smoker. Quitting is great but you need at least 24 months for the best benefit to come to you. This will again raise the cost in other ways.
(To know how costs of life insurance for smokers go up, we suggest that you read this article.)
Hope you have found our tips on how to save on life insurance useful.