Ways To Save Money On Life Insurance
In the event of death, life insurance is your assurance to your family protection. To the beneficiaries in a life insurance, this will be a set amount of money provided through life insurance upon the death of the insured individual. On the other hand, life insurance is also a means of investment or savings and there are several options and the protection it offers.
Term and whole life are the two of the most common types. In the event of death, term life provides the basic coverage while the latter accrues equity that can be passed to their heirs or used for other purposes.
Generally, a policy is purchased for a set period of time in term life insurance where payments are paid monthly, quarterly, semi-annually, or annually from one to 20 years. The amount of the benefit paid to the beneficiaries upon death will depends on the policy cost. For example, the premium of $100,000 death benefit will be more than a $20,000 death benefit.
In whole life insurance, it provides basic death benefits along with a ‘cash value’ that is built up as your savings that can be withdraw or borrow. Parts of the premium goes to the death benefit and another part goes to the cash value that will grow with the dividends or interest paid to the cash value amount. This means the higher the benefits, the higher your premiums going to be. This will be the downside but however when the monthly payments are higher, so does the cash value which is also tax deferred.
Term insurance is less expensive but every time you renew the policy, the premiums can increase substantially compared to whole insurance which may be much higher but remain the same every time.
How to Save Money on Life Insurance?
For the least cost and most coverage, consider term insurance.
If you are considering whole life, hold it for at least 15 years and avoid canceling after only a few years which can double up the insurance cost.
If you are healthy, avoid guaranteed life insurance which require no medical exams and sold to those who can afford it. These plans are expensive and suitable for individuals with health problems. So opt for a lower life insurance if you are healthy.
On the contrary, if you are unhealthy you will end up paying higher premiums than those who are healthy. Those with high blood pressure, diabetes, heart diseases, smokers or even if you are even overweight may end up paying more.
Shop online and compare the rates online. Find out the premium for the policy that is offered.
Lastly, determine if you can save money with the billing cycle changes once you have found your best policy. You may find that some premium costs less if you pay annually compared to a monthly payment and eventually save more money.