Many people are looking for ways to cut costs during these uncertain times. One area where you might want to save money is life insurance. If this is the case, there are numerous options for obtaining low-cost life insurance. (Alternatively, to save money on existing coverage.)
Before we get into our best affordable life insurance recommendations, keep in mind that not having life insurance is never a good idea. Your loved ones would be in a difficult situation if you and your earnings disappeared.
10 Ways to Save Money on Life Insurance
To begin, select low-cost term life insurance. Life insurance is classified into two types: term life insurance and permanent life insurance. Both provide a death benefit if you die while covered, but permanent life also includes a cash-value component. Term life insurance is the less expensive option for life insurance. Term life insurance is an excellent option for people who want the most coverage for the least amount of money. People can also combine the two to ensure that they have a large amount of coverage now (when they have children or debt) as well as lifelong coverage later on.
When you are young and healthy, buy insurance. When you're young and healthy, you usually have access to the most affordable life insurance. You may be able to lock in a low life insurance rate if you buy early. Furthermore, if you develop a health condition later in life, you will not be unable to obtain coverage.
Get quotes from several insurance companies. It pays to shop around for affordable life insurance, just like it does for anything else in life. An insurance agent or advisor can obtain quotes from multiple insurers. He or she can also help you compare coverage to ensure you get a good policy at a good price.
Examine your company's group insurance. Group life insurance is frequently subsidized by employers through the workplace. Furthermore, it is common to be able to obtain a certain level of coverage without having to take a medical exam. Investigate any employer-sponsored group coverage that might be available to you. Keep in mind that this coverage expires if your job does, so you should get your own individual life insurance policy.
Inquire about premium pricing. Some insurers offer premium discounts at certain levels of coverage. Purchasing $250,000 of coverage, for example, may be less expensive than purchasing $200,000 of coverage. Inquire with your insurance agent or counselor about any premium discounts that may be available.
Check to see if you can save money by paying ahead of time. Some insurers will give you a discount if you pay for the entire year in one lump sum (or in less frequent intervals like twice a year). Pay your premium in full rather than quarterly or monthly if your insurer offers this discount and you have the funds.
Obtain a renewal guarantee. A renewal guarantee allows you to have your term life insurance policy automatically renewed without having to take a medical exam. You simply pay more because you are older, not because your health is failing. This enables you to keep your low-cost term life insurance policy even if your health worsens.
Maintain (or strive for) good health. People in good health typically receive the most affordable life insurance. And, while you have no control over some circumstances, you do have control over others. These include eating well and exercising regularly to maintain a healthy weight, limiting alcohol consumption, managing stress, and not smoking or using drugs. If your health improves, ask your insurer if you can retake your medical exam; you'll often benefit from a lower premium for the remainder of the policy's term.
Consult a qualified insurance professional if you are experiencing health problems and/or have been denied coverage. If you are in good health, you should avoid having a medical exam for life insurance. By demonstrating your good health, you will be able to obtain the most affordable life insurance. You do, however, have options if you are in poor health or have been denied life insurance. One option is to work with an insurance professional who specializes in higher-risk candidates. Another option is to look into "simple issue" or "guaranteed issue" life insurance, which allows you to avoid the standard medical exam and obtain life insurance right away. Learn more about these options, as well as what to do if your life insurance application is turned down.
Begin small and gradually expand your coverage. Having something is always preferable to having nothing when it comes to life insurance. If you can't afford all of the coverage you need right now, start small. A healthy 30-year-old male can purchase a $250,000 20-year level term policy for as little as $13 per month. Even with this low-cost life insurance policy, if you died between the ages of 30 and 50, your loved ones would receive $250,000 if you died. (They'd also get the full $250,000 because life insurance proceeds are almost always tax-free.) As your savings and income grow, you can purchase more coverage until you reach the desired level.
Working with a professional insurance agent or advisor is the best way to investigate all of the low-cost life insurance options. There's no time like the present to find an insurance expert in your area, so use our Agent Locator right away.
Three Reasons to Rethink Life Insurance
The COVID-19 epidemic has changed many aspects of our lives, from daily activities to long-term goals. But one thing hasn't changed: the importance of life insurance. If you've been putting it off—or getting more of it—here are three compelling reasons to do so right now.
1. Financial security is provided by life insurance.
It can also serve as your family's financial foundation, providing security against unforeseeable disasters. Unfortunately, many Americans are uninsured or underinsured: only 50% of Americans own a policy, according to the 2020 Lincoln Financial Group Life Insurance Awareness Month Survey.
The COVID-19 outbreak, on the other hand, has highlighted the significance of life insurance. Because of the pandemic, more than a third of those polled believe life insurance is more important to have now, and a third have or plan to purchase new or additional life insurance.
Younger Americans, particularly Millennials, expressed a stronger desire to obtain life insurance. That's fantastic news, because they frequently achieve major life milestones, such as starting a family or buying their first home.
2. Life insurance provides more benefits than you might think, including living benefits.
The top reasons for purchasing life insurance, according to the survey, were to cover funeral expenses and to replace lost income to their family.
That makes perfect sense. In its most basic form, life insurance's tax-free death benefits ensure your loved ones are financially taken care of when you die, allowing them to pay off final bills and debt.
There are, however, plans that offer "living benefits" that can cover a person's overall financial needs, such as:
Increasing retirement income
Managing long-term care expenses
Keeping a company safe
And these lifestyle benefits are quite appealing to people: 45% of those polled said they would be more likely to buy life insurance if it provided more than just death benefits and could be used for future needs or emergencies while they were still alive. The good news is that such policies are available!
3. Getting life insurance may be easier and less expensive than you think.
The top two reasons respondents did not obtain life insurance, according to the survey, were the cost and competing financial concerns. However, life insurance can be quite affordable. In fact, if you're in good health, you might be able to purchase term life insurance for less than the cost of your monthly electric bill or your weekly morning coffee. There is insurance to suit every budget because there are so many options.
Technology advancements are also transforming the way we buy life insurance, from a time-consuming and inconvenient to a simpler, faster, and friendlier process. Furthermore, 40% of Millennials polled said they would be more likely to purchase life insurance if they could do so completely online. This is already an option! You can get a quote and apply for a policy online, and then electronically sign and deliver the policy. Many insurance companies even allow healthy people to avoid underwriting labs. Insurance can now be issued in as little as 24 hours.
While the global epidemic has increased awareness of the importance of life insurance, it should always be viewed as an important financial planning tool that can help families build, manage, protect, and pass on their assets and legacy. I'd recommend speaking with a financial or insurance professional, as well as your workplace benefits specialist, to help you identify where life insurance fits into your financial plan, confirm that the coverage you have still meets your needs, or explore your options if you need more coverage.