How To Get Cheap Life Insurance

Most people don’t give enough attention to life insurance. In fact, many don’t want to think about this subject at all. As unpalatable as the idea of planning for your own death might seem, there are plenty of reasons to look into buying life insurance now – even if you already have a policy. The following tips can help you secure good coverage without spending too much.

1. Figure out your needs. The most important reason for an individual to buy life insurance is to get protection against dying too soon. The person buying life insurance should be primarily concerned with seeing that his or her survivors don’t face financial hardship. There may be other reasons that apply: Life insurance is also purchased to pay estate taxes. Business relationships often require life insurance or can benefit from it. Annuities offer a secure way for consumers to make sure they don’t outlive their money. Beware of anyone who tries to sell you life insurance as an “investment.” Life insurance should be purchased for the protection it will give you.

As a general rule, when calculating how much life insurance you should have, it should be roughly between five and ten times your annual income depending on the circumstances of your particular life situation. Alternately, you can use online calculators to get a rough idea of how much money it would take to cover your surviving spouse’s expenses until retirement, and/or your children’s expenses until they reach adulthood or complete university or college.

2. Opt for term life. A term-life policy is the best and simplest option for most people ranging in age from about 20 to about 50. Cash-value life insurance can make sense for wealthy people over the age of 60 – but for most people, term insurance is the way to go.3. Get quotes online. Shop around for rates: Life insurance is a competitive marketplace, and much of the competition focuses on price. Don’t hesitate to seek premium quotes from several different companies. Many of the websites advertising on this site can give you plenty of pricing information fast – although all of it will be subject to a more detailed application process and a medical exam. Make sure that to mention all your health risks in your application. Life insurance companies investigate before paying and if any information submitted by you is found incomplete or false, your beneficiaries might not get the amount. 4. Get in shape. Healthy people have the best mortality risks and thus are much cheaper for companies to insure. Thus such customers are offered lower rates in comparison to those who have any kind of health concern such as diabetes, heart problem, or any other high risk factor. To improve your risk class, you can take steps such as quitting smoking, losing weight and reducing your cholesterol and blood pressure if they’re high. You also can get that exam before you apply for insurance so you’re not hit with any surprises. In some cases, the changes you make can save you tens of thousands of dollars over the life of a policy.

5. Decide how to buy. You can go it alone and buy insurance directly from the company, seek guidance from a fee-only financial planner, buy it through a commission-based financial planner, or buy it through an insurance agent. At specific coverage prices such as $250,000, companies often offer price breaks. Many people can actually pay less for more coverage. It’s a good idea to keep a check on how little your prices increase when you increase your coverage.

6. Understand how insures, brokers and agents get paid. Insurance agents and commission-only financial planners don’t make money unless they sell you insurance products. Fee-plus-commission (or fee-based) planners charge both a fee and a commission on products. Fee-only planners charge a fee for their guidance but don’t sell products; you would buy the insurance coverage on your own.

7. Do your research. Whether you decide to buy a policy on your own or hire a professional to help you, you should study up on life insurance as much as possible. This will help you feel more confident and informed. Never buy a policy you don’t understand: If you are given illustrations or insurance brochures, keep that material with your policy. Don’t let yourself get fast-talked into changes you don’t understand. If your agent or company cannot explain the policy terms to your satisfaction, shop elsewhere. Make sure you understand the guarantees in your policy (not just the agent’s promises of returns) and the surrender penalties if you choose to drop the policy at any time. These costs are often hidden in a life insurance or annuity policy.

8. Buy from a financially strong insurers. The insurance company should have an “A” rating or higher from rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings. You can save money by checking out the various options of payment on which the insurance company gives discounts. For example, many insurance companies give discounts to those customers who pay their premiums annually, or who pay monthly by electronic funds transfer (EFT).

9. Be on the alert for red flags. Avoid advisers who say they’re more knowledgeable about the insurance company than the rating agencies, or who claim that ratings are unimportant or unavailable. If you have a complaint, contact the adviser’s customer service department and speak up.

10. Make adjustments as needed. Your life insurance needs will change over the years – most notably when you marry, divorce, have a child or start caring for an aging parent. At a certain point – once your kids have all grown up, and once you know you’ve saved enough for retirement – you can decide to stop paying for life insurance entirely.

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Tags: annuity, financial planner, insurance agent, Insurance Basics, insurance calculator, insurance company, insurance policy, insurance quote, insurer, risk factor, term insurance