Finding affordable life insurance from a trustworthy company often falls to the bottom of the to-do list. Many Americans have trouble finding the right insurance policy, with 48% of adults confessing to having no insurance at all, according to the Life Insurance Consumer Report Study 2023 by Insurist.
So, how do you save money on a life insurance policy? Seventy-three percent of adults said that the cost of life insurance was too high. This guide provides some helpful tips on how to lower the cost of your life insurance.
Why Do You Need Life Insurance?
A life insurance policy provides security for family members and dependents. If you die unexpectedly, your loved ones could be left with financial commitments, medical care, and other unforeseen costs. Life insurance acts as a plan to protect your loved ones in the event of your unexpected death.
There are three main types of life insurance to consider when gathering quotes — level cover, increasing cover or decreasing cover. It is a good idea to discuss your needs with your family before you begin searching for the right policy. The cost of your life insurance policy will depend on variables such as your age, medical conditions, and amount of coverage.
Here are eight ways you can save money on life insurance.
1. Compare Quotes.
The wisest way to find the best price for any product is to shop around. Life insurance policies are no exception. Some things to consider when researching life insurance policies include the following:
- Look at reviews and financial ratings of insurers.
- Understand the different types of life insurance.
- Read policy documents before making a decision.
- Ask about extras and whether you need them.
Don’t be afraid to ask questions. Your insurance provider should be transparent about its fees and what is included in your insurance policy. Asking about the finer details and removing unnecessary elements from your coverage could save you money and stress in the future.
Sponsored Content
2. Get a Medical Assessment.
You must be honest with your insurance provider about your medical conditions and health status. Getting a physical exam from a registered health practitioner will reveal any hidden illnesses or issues that could affect your insurance premiums in the future.
Understanding your health and fitness levels will help you to find appropriate coverage from a company that will pay out in the event of your death. Many insurers will refuse payouts if they are unaware of critical illnesses or health conditions.
Sponsored Content
3. Stay Fit and Healthy.
Maintaining optimal health is one of the easiest ways to lower the cost of your life insurance policy. Your life insurance premiums could be reduced if you stay active and healthy. An annual health check will prove to your insurer that you are taking steps to improve your lifestyle and remain healthy. But you should stick to a healthy diet to ensure you are in the best health possible.
Sponsored Content
Sponsored Content
5. Avoid Overinsuring Yourself.
Life insurance providers may try to sell you more coverage than you need to earn extra commission. Paying for unnecessary extras could affect your lifestyle if the monthly payments are more than you can afford.
I recommend that your life insurance coverage should be no more than 10 times your salary. The monthly payments should be affordable and allow flexibility for savings and other financial investments that could protect your family’s future. The payout should pay off outstanding debts and give your loved ones enough money to survive without your income.
You may need more coverage if you have large amounts of debt or a big family. Discuss your needs with your family and assess your financial situation before you begin researching life insurance policies.
Sponsored Content
6. Consider a Joint Policy.
Combining life insurance coverage with your partner could be cheaper and more convenient. Protecting your spouse by including them in a joint policy is a better choice if you have children or dependent family members. However, a joint policy will pay out only once, so it is worth considering this when shopping for coverage.
Joint life insurance coverage is often more affordable than two separate policies. Compare single and joint policies to see how much you could save by combining your insurance with your partner.
Sponsored Content
7. Buy Insurance as Early as Possible.
The cost of life insurance increases as you get older and develop health problems. Buying your insurance policy as soon as possible could guarantee your premiums remain low throughout your life. Your insurance policy is more likely to be affordable if you are young, fit and healthy.
Sponsored Content
8. Find a Suitable Policy for Your Needs.
Large payouts equal expensive insurance premiums. The payout should cover any large debts or financial commitments and take care of your family. Some important things to consider when choosing an insurance policy include the following:
- Paying for the future — weddings, college funds, funerals, etc.
- Disability or paralysis coverage. (Remember that there is also a possibility to qualify for Social Security disability benefits.)
- Medical costs and long-term care.
- Terminal illness coverage and associated costs.
Finding the right life insurance is a personal experience with lots of variables to consider. Although it is difficult to plan for the future, you should discuss potential problems and health conditions with your family to ensure you have the best coverage to protect your loved ones if you pass away.
Final Thoughts
Saving money on your life insurance is easy when you conduct thorough research. Finding a policy that suits your needs will guarantee the best outcome. Some useful things to remember when searching for life insurance include the following:
- Long-term policies are more expensive.
- High payouts mean larger premiums.
- Joint policies are cheaper.
The best way to find the right policy is to collect several quotes and discuss them with your loved ones. Speak to a financial adviser if you have more questions about life insurance and need additional advice.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
Sponsored Content
-
Dow Adds 516 Points on Broad Optimism: Stock Market TodayEasing trade war tensions and promise from early earnings reports has investors looking on the bright side to start the week.
-
Dave Ramsey Tells Us the Biggest Retirement Mistake You Can MakeThe talk-show host, author and podcaster tells Kiplinger what people can do to ensure a happy retirement.
-
I'm a Wealth Adviser: These Are the Pros and Cons of Alternative Investments in Workplace Retirement AccountsWhile alternatives offer diversification and higher potential returns, including them in your workplace retirement plan would require careful consideration.
-
I'm a Financial Planner: If You're Within 10 Years of Retiring, Do This TodayDon't want to run out of money in retirement? You need a retirement plan that accounts for income, market risk, taxes and more. Don't regret putting it off.
-
Five Keys to Retirement Happiness That Have Nothing to Do With MoneyConsider how your housing needs will change, what you'll do with your time, maintaining social connections and keeping mentally and physically fit.
-
Budget Hacks Won't Cut It: These Five Strategies From a Financial Planner Can Help Build Significant WealthCutting out your daily latte might make you feel virtuous, but tracking pennies won't pay off. Here are some strategies that can actually build wealth.
-
To Unwrap a Budget-Friendly Holiday, Consider These Smart Moves From a Financial ProfessionalYou can avoid a 'holiday hangover' of debt by setting a realistic budget, making a detailed list, considering alternative gifts, starting to save now and more.
-
Treat Home Equity Like Other Investments in Your Retirement Plan: Look at Its Track RecordHomeowners who are considering using home equity in their retirement plan can analyze it like they do their other investments. Here's how.
-
Why Does It Take Insurers So Darn Long to Pay Claims? An Insurance Expert ExplainsThe process of verification, investigation and cost assessment after a loss is complex and goes beyond simply cutting a check.
-
Two Reasons to Consider Deferred Compensation in the Wake of the OBBB, From a Financial PlannerDeferred compensation plans let you potentially lower your current taxes and help to keep you out of a higher tax bracket. It's important to consider the risks.
