Facing High Premiums Every Where? Here’s How to Save on Your Life Insurance Policy

Health insurance, auto insurance, property insurance… these are the policies that most people go for. What’s missing?

A life insurance policy!

Previously, we talked about the different types of life insurance policies. To give you a recap — a life insurance policy is a policy that offers your family death benefits in the form of a lump sum payment. 

 

 

Generally, there are three types of life insurance policies, which include term life insurance, universal life insurance and whole life insurance. The names of the policies explain what they offer — term life insurance is for a specific period of time, universal life insurance is for a flexible time period and whole life insurance is for a lifetime.

Following is a table that will help you understand the difference between these life insurance policies:

 

Comparing Different Life Insurance Policies
	Term Life Insurance	Universal Life Insurance	Whole Life Insurance
What It Offers	Income is replaced throughout the working years	Income protection, wealth transfer and tax-deferred wealth accumulation	Tax-deferred wealth accumulation, wealth transfer and preservation
Protection Period	A couple of years	Flexible (for a lifetime)	For a lifetime
Cost Differences	Less expensive as compared to permanent	More expensive as compared to term	More expensive as  compared to term
Premiums	Typically fixed	Flexible	Typically fixed
Beneficiary Benefits	Income tax-free payment	Income tax-free payment	Income tax-free payment
Builds Equity	No	Yes	Yes
Investment Options	No	No	No

 

If you look at the cost differences and premiums columns, you will see that the cost of each policy is different. Many people opt for term life insurance because they have a small budget and can’t afford to buy whole life insurance.

When it comes to taking care of your family, you should never compromise! However, this doesn’t mean that you go for cheap life insurance policies because that is a sure way to get fewer benefits. So, what should you do?

Here are a few tips on how to lower the premium further on your life insurance policy even after finding an affordable one:

 

Tip #1

Your Age

 

The old saying, “The earlier, the better” stands to be quite beneficial when it comes to buying a life insurance policy. If you are young, you have a future ahead of you and in order to secure it, you need to have life insurance. The younger you are, the lower the premium rates will be.

 

Tip #2

Lifestyle Habits

 

Smoking and drinking are two habits that impact your health a lot. Excessive smoking and drinking can lead to severe health problems such as heart ailments, cancer, etc. The insurer sees these habits as a red flag.

As a result, the insurer can and will argue that you need a higher coverage. Your unhealthy lifestyle directly impacts the cost of your insurance policy. So, if you haven’t bought a life insurance policy yet, it’s time to detox.

Every life insurance policy comes with a medial parameter. You can change your coverage at the time of renewal by showing the insurer that you have adopted healthy lifestyle habits.

If you have bought whole life insurance, then contact your insurance agent and ask him to review your premium based on your current medical report. Chances are — if the tests show that you are maintaining a healthy diet, the insurer will comply with your request.

 

Tip #3

Sum Insured and Polciy Terms

 

There are two main factors that increase the premium— time period of the policy and the coverage that you opt for. You will get more coverage and more benefits if you have a higher premium, but this could also put you into debt. The monthly payments will slowly become a burden and you won’t be able to keep up with them in the future.

 

Tip #4

Your Health Condition

 

Whoever said, “health is wealth” was absolutely right! In life insurance, health problems have no say. If you suffer from health problems, you will find it extremely difficult to buy a policy.

The number one health problem that makes you ineligible for this policy is obesity because it leads to diseases such as diabetes, heart attacks, etc. If you suffer from these problems, your insurer will ask you to purchase a higher coverage.

It goes without saying that your lifestyle habits contribute to your health condition. So, change your diet and adopt a healthy lifestyle to get a lower insurance premium and to improve your life, too.

 

Tip #5

Additional Riders

 

Ahh… the add-ons. People go a little crazy with them when customizing their insurance plan. You don’t need to include all the add-ons in your policy just because you think they might come in handy in the future.

Before looking at these optional benefits, have a look at the basics that your life insurance policy offers. Do they fulfill your current needs? If yes, then you don’t need any add-ons. The more add-ons you include in your plan, the higher the premium will be.

 

Tip #6

Premium Payment Frequency

 

There are plenty of options for premium payment, which include single payment (when you purchase the policy), yearly payment, bi-annual payment, quarterly payment and monthly payment. The best two amongst these are single payment and yearly payment. Since you will be paying such a huge amount upfront, you will save a lot on the interest charges. 

 

Tip #7

Buy Online

 

 In conclusion, the best benefit of buying a life insurance policy at an early age is that the premium will be quite low. If you are looking for a reputable and trust-worthy life insurance company, then visit Pawson. The company provides different types of life insurance policies for families and individuals. To know more about their policies, contact them at 203-481-8898.