Ten Easy Ways To Minimize Your Life Insurance Premiums

Life insurance is very essential for your family in case of you passing away than expected. But, depending on several factors, life insurance can become expensive. Regular premium payment must be done to ensure that your family members get their entitled death benefit.

Fortunately, with some little planning, your premium payments can be reduced. The following ten ways will help you in minimizing your premium for life insurance:

1. Shopping around for best value: Never get an insurance policy immediately after speaking with first agent. Get quotes from more agents by shopping around. Compare policies that have similar features and benefits including death benefit amount and policy length. Compare received quotes and choose a policy which provides best premium payment value after shopping around.

2. Look for insurance having package discounts: From the same company, try purchasing more than one form of insurance to reduce your premium payment. Packages including auto, life, and home insurance are sold by many insurance agents. You might get discount on all premiums if you purchase more than one insurance coverage from an agent. This can lower your life insurance premium too.

3. Purchasing through employer: Purchase life insurance through your employer since they might offer it as a part of benefits package with discount. Since your employer might pay a part of your premium for life insurance, speak about available options to benefits or HR department to get a good price. Fine print should be understood since some policies reduce your benefits when you change your job. Before agreeing, be aware of benefits and eligibility requirements.

4. Term life insurance: If your concern is about premium payment, then consider term life insurance. It is good only for a specific time period such as 10, 20, or 30 years. It is inexpensive than universal or whole life insurance since it does not build cash value. More coverage can be got for less with term life. You have a refund scheme in some term life policies if you live for the entire term of the policy.

5. Abstain from smoking: Since insurance is mainly about risk, your premium depends on your risk. So, if you engage in dangerous activities such as smoking, you will have higher premiums since risk of death is high. So quit smoking and look for a lower premium.

6. Purchase while you are young: Insurance companies consider age as risk factor. The company invests your payment to earn good return. They are in business; they can’t insure people if they have no money. The longer you live, the sooner they earn money. If not, they have to pay your death benefit without get enough premiums and investment returns for covering policy cost. If you buy when you’re young, the risk of loss is less for the company.

7. Avoid risk: Life insurance companies increases your
premium amount if you involve in dangerous activities or extreme sports since you have a chance of dying early.

8. Practicing good health habits: Healthy people live longer. You will be charged lower premium if you show the insurance company that you are healthy. Engage in stress-relieving activities, eat healthy, and get regular exercise. Health exam also sets your premium. You will have reduced premiums if you have good BP, cholesterol, and health habits.

9. Multiples of $250,000: To get a life insurance dollar with great value, round up. Sometimes, $240,000 life insurance costs more than $250,000 one. Stick to multiples of $250,000 to get affordable premium. Figure out rate per 1000 dollar coverage. Price break is there after a specific coverage level.

10. Buying only the needed coverage: Surprisingly, some people might be over insured. More than actually needed coverage is purchased by them. Your money can be effectively used for premium payments and investment by calculating the needed coverage. Getting a coverage equaling 5 or 7 times the annual salary is one thumb rule. One more way to calculate is by adding your yearly expenses and multiplying it by the years where you don’t have income. You can also calculate by considering your obligations and money needed for your children to go college. After considering how your money is going to be used, you’re needs, and the need for coverage, round off that amount to nearest multiple of 250,000 dollars.