While having a life insurance policy is important, there is no reason why you should pay any more than necessary for the privilege. Here are some tips that can help you pay as little in premiums as possible while still getting sufficient life insurance coverage.
1 – Price shop
Life insurance policies are like any product. The attributes and cost of the product will vary widely between different providers, and you can often pay a much lower price just by taking a few days to properly price shop and compare policy terms between different providers. Price comparison sites like InsuranceHero.org.uk can make this comparison process much easier.
2 – Buy it young
It doesn’t matter how old you are — the best time to get life insurance is now. The price of insurance only increases as you grow older, to the point where getting a 20-year term insurance policy at age 50 may cost as much as getting a 30-year term insurance policy at age 40. To make matters worse, the longer you live the higher the chance that you’ll be diagnosed with a serious medical condition or suffer a stroke. Both of which will drastically increase the price of premiums if you try to get insured after the event.
You can get around that issue by getting a policy at a younger age, which will allow you to lock in that lower price for years to come. Look for policies with guaranteed premiums, as those are the type that won’t raise your premiums over the years. Except maybe tiny increases to account for inflation.
3 – Don’t overdo the policy
It can be tempting to insure your life for an amount that will allow your family to live comfortably for decades to come, but that’s not the goal of a life insurance policy. This isn’t supposed to be a lottery ticket, it’s meant to be a risk management tool. And the bigger the value of your policy, the more you’ll have to pay on premiums.
If you can, you should get a policy that will allow your family to pay the bills, the mortgage, and live comfortably for 5 to 10 years after that. But if you can’t afford the premiums on a policy that provides that much safety, the solution isn’t to skip on life insurance — the solution is to get a smaller policy. Sure an insurance policy that is worth just $50.000 may not even get your family through a full year without you, but it’s still better than having no insurance at all.
4 – Stay healthy
As mentioned, insurance premiums take into account your medical history. Cardiovascular problems, obesity, age, and chronic diseases can all have a big impact on the price of your premiums. But while negative health traits can increase your premiums, positive health traits can decrease it.
There are insurance policies out there that offer smaller premiums for people who stay healthy and actively exercise. The terms of the policy will be contingent on the insured person maintaining that healthy lifestyle. Assuming you were already planning to be healthy, this is a good way to pay lower premiums. Especially as you grow older.