Controlling Your Term Life Insurance Cost
Although term life insurance policies with similar terms are essentially the same regardless of which company issues them, the cost of a policy can vary wildly. Because of this, careful shopping, combined with an accurate assessment of one’s needs, can lead to significant savings on this type of coverage. Term life insurance cost.
The first way to control the cost of a term life insurance policy is to ensure that one is not buying too much coverage. Advisers will typically recommend coverage of between 7-15 times the insured’s annual income. However, this rule of thumb is not always appropriate. For instance, if an individual has a large nest egg, term life insurance may be completely unnecessary. Conversely, if the surviving spouse is young and not working, they may require even more than 15 times their partner’s income to provide for their lifetime. On the other hand, if both members of a couple are working, enough insurance to simply pay down some debts may be enough. In any case, reviewing the amount of coverage makes a great deal of sense.
The next consideration is to ensure that the right type of insurance is being purchased. Creative policy options such as return-of-premium policies, which will return the entire premium paid at the end of the coverage period in exchange for a significantly higher premium, are frequently not good investments. A careful reconsideration with the assistance of a financial advisor can result in savings here. Another area to look into is the level term of the insurance. The longer that a term life insurance policy’s premium stays unchanged, the more it will cost. For a forty-five year old who plans to retire at sixty, a thirty-year level term policy is most likely a waste of money when a fifteen or twenty year term policy would provide adequate time to transition into retirement and out of needing a salary.
Lifestyle and health concerns can also affect insurance premiums by orders of magnitude. If one has stopped smoking or shed “high-risk” behaviors such as riding a motorcycle or flying a private plane, one should obtain a new quote. Another area of savings can occur when one loses weight or takes action to reduce blood pressure or cholesterol. Sustainable changes in these areas can lead to being moved into a different risk class which could result in premium reductions of well over fifty percent.
Once one has assessed one’s insurance needs and risk profiles, it becomes very easy to obtain new life insurance quotes. Thanks to the myriad of web-based insurance quoting systems, premium estimates can be received in just a few minutes. Upon receiving these quotes, though, one must ensure that both companies are of similar strength and security and that the two quotes are on the same basis vis-à-vis risk class. As long as the comparison is between truly equivalent policies, the best deal will become immediately visible. Once the best policy option is found, switching insurers is usually a very easy task.