It seems like as life goes on, everything gets more expensive. I’m not just talking about the costs of goods and services - moving deeper into your adult years is pricey because you simply have to spend more to hold onto your status as a Responsible Person.
Life insurance is a good example of this phenomenon. As a young adult, you may have easily been able to pass on a life insurance policy – after all, you weren’t married and didn’t have dependants. But as the years go by, those things change, and all of a sudden you have to buy life insurance to protect your family in case something happens to you.
But the good news is that there are some easy ways to cut back on your life insurance costs. Not sure where to start? Take a look at the five tips below:
1.Shop around
As with most other types of coverage, life insurance rates can vary wildly between different companies. Be sure to do a lot of comparison shopping before you commit to any one insurer, and evaluate rates again every few years.
2.Buy young
Simply put, life insurance is cheaper when you’re young. This is because, theoretically, you’re healthier and less likely to die, meaning the life insurance company is less likely to have to pay out on your policy. All this means that buying life insurance as soon as you think you might need it is a smart move.
3.Don’t smoke
Smoking is the easiest way to get burned on your life insurance premium, so ditch the cigarettes as soon possible. If you purchased your policy as a smoker but have since quit, be sure to let your insurer know – you’ll likely score a reduction in your rates.
4.Stick to term
In nearly every case, term life insurance is cheaper than whole life. Unless there’s a compelling reason for you to buy a whole life policy – like you’re very wealthy and have exhausted all other tax-sheltered account options – stick to term.
5.Pay annually
A lot of people automatically default to paying their insurance premiums on a monthly basis, but if you pay annually you’ll probably get a discount. To make this more manageable, save a little money every month to be ready when the yearly bill for your premium arrives.
Buying life insurance might be boring, but it’s essential to your family’s financial security. Use the tips above to keep costs as low as possible!
