Life insurance is often a difficult topic to talk about because it is literally a matter of life and death. However, it’s one of the most important types of insurance to have. Ignoring the importance of life insurance can have a lifelong impact on your loved ones. Here are 5 strategies to help lower life insurance premiums.
Why Should You Purchase Life Insurance?
Many people think life insurance is an easily avoidable expense. However, if you have children or a spouse that depends on your income, they need you to have life insurance. Life insurance pays a death benefit if something happens to you. It can also cover your funeral expenses so that your family doesn’t have to worry about coming up with the money to cover these expenses for you.
Related: 5 Differences Between Whole and Term Life Insurance
Stay As Healthy As You Can
Life insurance premiums are based on health. The more you do to get healthy and stay healthy the more you can save on life insurance. This includes things like losing weight and giving up smoking. Life insurance is priced on risk. Because of that, you can save money by eliminating things that make you more risky. If you have an exam coming up for your life insurance policy, start getting healthy well in advance of the exam. The better shape you’re in at the time of your examination, the better price you can get on your insurance.
Dangerous Hobbies May Make Insurance More Expensive
Not only do life insurance providers consider your health when they’re giving you a policy, they also consider things you do in everyday life that may put you at risk. Certain hobbies, like scuba diving or race car driving, can be make you appear more risky and increase the cost of your insurance. Don’t hide your hobbies in an attempt to get less expensive insurance. Your insurance company may use that as a way to avoid paying out a death benefit.
Consider Final Expenses in the Cost
Before you finalize your insurance policy, consider what type of funeral you would like to have. Getting an estimate can help you decide how much benefit you should get. You want to get an insurance policy that’s large enough to pay for your final expenses and still leave your family with a sizable amount.
Related: Tips to Not Leave Your Family Financially Stranded
Include Your Family’s Long-Term Needs
You may want to pay off the mortgage for your spouse. You may want to put your kids through college. Keep these in mind as you consider the best death benefit amount. As your life changes, you may also have to change your insurance to compensate. For example, when your adult children no longer rely on you, you can lower your insurance amount. You can use an online calculator to figure out how much death benefit you need. Some experts advise you to multiply your annual salary by 8 to estimate the amount you’ll need.
Your insurance agent will be able to answer many of the questions you have about life insurance. However, it’s important that you have some understanding of the insurance and your needs to avoid being sold into a policy that you don’t need. No matter the amount of insurance you ultimately purchase, just make sure you have the insurance so your family has adequate coverage.
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