8 Clever Ways to Save Money on Life Insurance Premiums

It’s no secret that the cost of living and inflation is rising every passing day, and people are finding it extremely difficult to keep up. For most of us, it’s easy to get overwhelmed by it all. But it helps to know that you’re not alone – and that there are ways to cut costs while protecting your family’s financial future.

A life insurance policy offers much-needed security for family members and dependents. Sudden deaths are not uncommon; in such an instance, your loved ones could be left with hefty financial commitments, medical costs, and other expenses. A life insurance plan offers protection during such events. Life insurance can also come in handy after a tragedy or accident that prevents you from working or providing for yourself or your family.

While it’s something almost everyone needs, the costs associated often prevent people from getting life insurance coverage. Yes, life insurance gets more expensive as you get older, but there are also many ways of making your policy more affordable.

In this article, we look at some clever ways to save money on life insurance premiums.

Shop Around & Compare Quotes

It is easy to find yourself overwhelmed by the sheer options of life insurance policies. While you might be tempted to commit to the very first company with a reasonable offer, it’s wiser to do your research to see which insurer can offer the best deal. Some things you might want to consider:

–       Reading reviews and financial ratings

–       Having a clear understanding of different life insurance plans

–       Thoroughly reading through policy documents before making a decision

–       Inquiring about extras and if you actually need them

Remember not to shy away from asking questions. Ideally, your insurance provider should maintain transparency about costs and what is covered in your insurance policy, so don’t be afraid to ask for finer details that can help save money.

Avoid Getting More Coverage Than Needed

You are likely to come across life insurance providers who try relentlessly to sell you more coverage than you need so they can get their extra commission. But remember that committing to paying higher monthly payments than you can afford is a terrible idea.

Ideally, your life insurance coverage should be at most ten times your salary. Getting the “right size” cover is very important. Therefore, buying only the amount of policy coverage you need is best. You can always upgrade to a higher range later if you need to. Since life insurance premiums are calculated based on several factors, it goes without saying that the more coverage you buy, the more you have to pay for it. This is why you need to figure out how much insurance you need in the first place.

Why pay millions of dollars in coverage when you don’t have an expensive house or if you’re still single? On the other hand, if you’re the sole breadwinner for your family or have a big mortgage to pay, you need to have enough insurance to leave your family members financially secure if anything happens to you. So, you must carefully assess your financial situation before deciding on a life insurance policy.

Pay your Premiums Upfront

While it’s understandable that not everyone can afford to produce a massive wad of cash at once to pay the entire annual premium, the fact remains that this is your best bet to save money on your policy. Think of it as a discount for making the total payment upfront, although in reality, it is akin to a penalty for being unable to do so. Some insurers will add service charges or offer a slightly higher premium for customers who pay monthly or quarterly premiums. Therefore, opting for one annual payment could help avoid these costly extra charges. In fact, you can save as much as 8% when you bypass those additional charges for monthly premiums – that’s extra money in your pocket!

Maintain a Term Life Policy

Life insurance policies are not all the same; they have huge differences. While permanent life policies cover you so long as you pay the premiums, term life stays in effect for a stipulated number of years or a specific need, and the policy will have to be renewed after that. Between the two, term life insurance is typically cheaper, and some term policies can be converted to permanent insurance in exchange for paying higher premiums.

Buy Your Policy When You’re Young

Did you know that life insurance costs increase as you get older and find yourself more vulnerable to health issues? When you buy life insurance when you’re younger, the monthly premium will be lower. So if you wait until you’re in poorer health to get life insurance (and it is a simple fact that the older you get, the more likely you are to develop chronic conditions), the costs will be more.

Stay In Good Health

Taking care of yourself and your health is one of the easiest ways to keep your life insurance costs low. Eat healthy, exercise regularly, manage your sleep well, and handle emotional stress well to avoid medical conditions that can affect your premium costs.

It would also be best to quit smoking because being a smoker will make you eligible for higher premiums. If you’re tobacco-free for at least one year, you can request to switch to non-smoker status – and you’ll be amazed to see the reduction in your premium!

Consider a Joint Policy

You can protect your spouse by including them in joint life insurance coverage. This is a smarter choice if you have children or dependent family members because joint coverage is more affordable than two different policies.

Don’t Forget To Renew Your Policy

If you forget to renew your policy, you must start over right from the application process and pay the new premium based on your age – which is likely to be higher than your previous one. So, please make sure to stay on top of things so you can avoid this mistake!

Final Thoughts

Just like with everything else out there, spending some extra time on research can help in saving costs in the long run when it comes to shopping for insurance. We hope the tips mentioned above give you a heads-up on how to save money on life insurance premiums.