Friday, 11 Oct 2013
Millions of Americans have purchased life insurance to help protect their families’ financial futures. A good life insurance policy can help a spouse, children or other loved ones from being left behind buried in a mountain of debt and bills after the family breadwinner dies. Sure, most people would do anything for their family and other loved ones, but there’s no reason to overpay for life insurance coverage.
Here are five life insurance buying tips that can really pay off. You might be able to save money and get more life insurance coverage for less.
1: Look for Milestone Discounts
Your insurance company might offer price breaks called milestone discounts for policies that carry higher coverage amounts. This means, for example, that you might get a price break for buying $500,000,000 worth of coverage instead of $400,000.
2: Consider Payment Options
State Farm and other life insurance companies allow policy holders to pay their premiums either monthly, semi-annually or annually. Paying premiums annually, or once per year, can save policy holders money by avoiding having to pay financing or other fees which are commonly part of paying monthly. Check with your insurance company and see if you can save by paying your premiums annually or twice a year.
3: Don’t Wait: Buy While You’re Young
Most young people who are generally healthy don’t think about buying life insurance, but that’s the best (and cheapest) time to buy. Recent studies have found that Gen Xers are behind the times on buying life insurance, but life insurance premiums are usually lower when you are young than if you wait until later in life. Or, in some cases, waiting too long could prevent you from getting life insurance at any price.
4: Buy Only What You Need
Not everyone needs millions of dollars in life insurance coverage. The amount of coverage you need is based on your current and future debts, your income and other factors. Don’t make the mistake of buying too much (or too little) life insurance. Taking a good close look at your current and future financial needs and buying enough coverage to provide for those needs is a good way to avoid paying too much for life insurance.
5: Check Out Coverage With Renewal Guarantees
Renewal guarantees are part of some life insurance policies. They mean the policy holder is guaranteed at least the opportunity to renew their term life insurance policy when the current term expires without having to retake the medical exam. The premium on the renewed policy will be based on your current age, but you won’t have to start the shopping process all over again. Also, being able to skip the medical exam can help you save some money if your health has declined since you first bought coverage.
By Samantha B. Rivers
Samantha is a freelance writer based in Chicago who writes about life insurance and other finance topics online. Follow her on Twitter @SassySammyBee.