051322 Ways to pay less for Life Insurance...

Ways to Pay Less for Life Insurance

 

Buying life insurance may be less costly than you think, particularly

if you follow some fairly simple steps to keep your premiums down.

Research from LIMRA, a membership organization for life insurers,

shows that despite record-high consumer intent to purchase coverage,

“too many Americans mistakenly feel life insurance is financially out

of reach or too difficult to obtain.”

 

If you’re looking for a policy that won’t break the bank, while still

covering your loved one's expenses after you die, a number of moves

can allow you to score the lowest rate you can.

 

Permanent life insurance, such as whole life coverage, provides lifelong

coverage, along with a savings component of a policy known as its

cash value. But you'll pay a price for those advantages. A permanent

policy can easily cost three to five times as much as buying the same

amount of term life insurance, says Barb Pietrangelo, a financial planner

and insurance expert at Prudential. On average, term life policies cost

only about $165 per year, LIMRA reports.

 

As the name implies, term life insurance covers you for a defined period,

typically between 10 and 30 years. Select a term length that will cover

the years your family will most need protection. That might be the time

until your children reach adulthood or your mortgage will be paid off.

 

While you should be careful not to choose a term that's too short, there's

a financial incentive to not buy longer coverage than you really need.

The longer the policy term, as a rule, the higher the annual premium.

Get insured when you’re still young.

 

The main reason to buy life insurance earlier in life is that, as a rule, the

younger and healthier you are, the lower your premium. Taking out a

policy in your 20s or 30s… when you're less likely to suffer health

conditions like diabetes, high cholesterol or high blood pressure… allows

you to lock in the most affordable coverage for the coming decades.

 

“When you buy life insurance young, your premiums remain the same for

the duration of your policy unless you change the coverage amount.

This will reduce the total amount you’ll spend on life insurance throughout

your lifetime,” explains LIMRA CEO David Levenson.

 

However, the sooner a term policy begins, of course, the sooner it ends… 

potentially leaving you uninsured at an age where you still require coverage.

If you still need insurance when the policy term expires, most life insurers

offer the option to convert your term life policy to a permanent one, says

John Buenger, senior financial manager and advisor at the Rice Agency.

 

Such a conversion, though, will subject you to the sticker shock of a

permanent policy. Another alternative for continuing coverage is to take out

another term life policy. While the premium will be lower than for converting

the old policy to a permanent one, you'll still pay more than for the original

policy, because you'll be older than you were when you got that coverage.

 

However, you may not need the same death benefit as you did decades ago,

because your kids are out on their own or you've retired the mortgage.

So you could offset at least some of the impact of your age on the policy's

cost by buying a lower amount of coverage than you originally had.

 

Quit smoking

 

The health risks associated with tobacco use mean insurers set higher

premiums for smokers than nonsmokers. According to the Centers for

Disease Control and Prevention, cigarette smoking is linked to about 80%

to 90% of lung cancer deaths in the U.S.

 

“Quitting smoking can save you a lot of money in the long run,” says

David Adler, president of Adler Insurance Group. “If you already have a life

insurance policy and have quit smoking, request a re-qualification for

nonsmoker rates after you've been tobacco-free for at least 12 months.”

 

Live healthily

 

Several life insurers offer policy discounts if you exercise or otherwise take

good care of yourself, and are prepared to share details about your activity

via an app and a wearable monitor such as a Fitbit.

 

Make premium payments annually

 

How you pay your premiums can help you save money on life insurance,

says Ben Reynolds, CEO of Sure Dividend. Paying for your policy once a

year, rather than every month, is a less expensive option, he says.

 

Not everyone can afford to make annual premium payments, but those who

can could save up to 5% in premiums, depending on the carrier.

 

Buy only the coverage your family will need

 

Purchasing a life insurance policy involves choosing a death benefit amount

that will allow your beneficiaries to be financially solvent were you to die.

As with determining the right policy term, it's prudent to buy no more coverage

than your family will really require.

 

The Insurance Information Institute suggests you first take into account

other sources of income your family might have access to after your death,

such as Social Security and retirement benefits or an employer-sponsored

life insurance policy.

 

Next, add up the expenses your survivors would incur if you died.

These could include burial expenses, replacing hidden income… such as

work benefits that aren’t part of your wages… or the replacement costs for

any services you provide for the family, like tax preparation.

 

Once you have totaled those numbers, subtract your family's total income

and other assets from that sum. This should give you a relatively accurate

picture of how much coverage your family will actually need to be made

whole in your absence. This methodology is more precise… and may result

in lesser coverage and lower premiums… than some other methods of 

calculating life insurance needs, such as buying a multiple of your annual income.

 

Finally, as with other forms of insurance, the surest way to find the right life

insurance at the right price is to compare what different insurers are offering.

This is something you can do on your own if you already know what you need.

Still, you may want to consider working with an independent agent .

Such a intermediary can shop for policies from different life insurance companies 

so you can get the lowest premium, says Adler.

 

 

Author: Ana Reina
https://fflheartland.advisorprofiles.com/article/526800

 

 

 

Hayden Childs

Alabama Licensed Agent

(205) 269-1382

 

Looking for Term Coverage

Consider…

 

PlumLife

 

https://www.helloplum.com/agent/childs-806