Everyone need life insurance to protect thier family finaincally in the event of a tragedy. Unfortunately, not everyone is in a position to be able to afford coverage. That is where term life insurance comes in.
Term life insurance has traditionally been the cheapest way to get the coverage you need by offering a set amount of insurance for a certain period of time. As cost effective as it is, some people still find the cost of a term life policy prohibitive and therefore must either consider taking out less insurance or opt out altogether. To help you better manage your insurance needs – and your budget – there are some simple things you can do to cut the cost of term life insurance.
Take Out Longer Terms
Term life insurance is only set for a specific time period 0f time—usually 5-20 years. After the term is up, you must reapply for coverage, which usually means paying a higher premium with each renewal. One of the best ways to keep costs down is to take out the longest term your insurer will allow at the time you take out your policy. Now keep in mind that this may mean paying a slightly higher premium every year; but it is well worth it. Even when you notice the premium a bit higher on a longer term policy, remember that you will not have to reapply as soon and undergo fee scrutiny. Consider this: even if your health remained relatively the same, your age alone would shoot that policy price up 5-20% when it comes up for renewal! Add in even the most miniscule health issue and you could pay even more. This could costs oyu hundreds (or even thousands) more over the course of a decade ot two. The key to keeping your long-term costs down is to buy when you are at your peak age and health status and get the longest possible policy you can.
Stay Healthy
Your health status is a direct link to how much you pay for any kind of life insurance policy. The absolute best thing you can do to keep the cost of term life insurance down is to stay as healthy as you can. Watch your weight; your cholesterol; your sugar levels and your blood pressure. Be proactive in your treatment and always take the necessary precautions to keep a small health issue from becoming a big (and expensive) one. Never underestimate what even a small weight gain can do to your life insurance premiums. Insurers play a numbers game and they sue a lot of statistics to charge you more. So, if you are over 40 and weigh 15 pounds more than you should, they are going to assume that you are going to gain even more weight in the next 10 years and have even more health issues, so they are going to charge you more for that policy than they would someone within a normal weight range.
Consider a Conversion Policy
An unhealthy family history can send your life insurance premiums through the roof (or keep you from even getting any insurance) as you grow older. Insurance companies believe that if your parents had diabetes, you will too and punish you financially for that family history. This usually means paying more initially and being denied coverage if you too develop the same health problems. One way to combat this problem is to consider a conversion plan. This will allow you to convert a term life insurance plan into a permanent plan if you find yourself facing medical issues down the line. This will allow you to pay less now, while you are healthy; but ensure coverage later when you may not be.
Buy All of Your Insurance From One Carrier
Another simple way to keep the cost of term life insurance down is to use a single carrier for all of your insurance needs. Buying your homeowner’s, car, and life insurance from one company (and one agent) can yield significant discounts on all.
Watch Your Credit Rating
Yes, bad credit will follow you everywhere – including your insurance agent’s office! Many companies are now looking at their customer’s credit scores to determine how much they should charge. Those with poor credit scores often pay 10-30% more for insurance coverage. Why? They are deemed irresponsible and a poor risk. Fair or not, this is common practice in today’s insurance world. So, be sure to keep that credit rating as high as you can to keep your insurance rates as low as possible.
Term life insurance may be cheaper than other forms of life insurance. Still, that does not mean there aren’t ways to keep costs down and save a few bucks in premium costs over the years. Be a savvy consumer and watch for ways to save on all of your term life insurance needs.