How to Save on Life Insurance
Food, clothing, and shelter are not the only commodities that you can provide your family for them to be safe and secure. If you really desire on ensuring that your loved ones are well taken care of at all times, you will need to purchase life insurance. It is a necessity rather than an optional product that you can buy for your family’s financial stability if you die prematurely in the future. In effect, the benefits that are guaranteed to be derived from the policy will be awarded to your beneficiaries right away. This is the single most important function that a life insurance serves. All other features are deemed secondary in nature and are perceived to be optional instead.
• Protecting Beneficiaries
As mentioned, the primary purpose of a life insurance policy is to protect loved ones from sudden loss replacing the income that you used to bring in to the household. With a life insurance in force, you can be secure in knowing that they do not have to suffer from financial losses. They will have the sufficient means to meet daily needs and pay off debts and financial obligations that you may have left behind. The death benefits also cover for funeral costs as well as hospitalization fees. With a life insurance policy, your family will find it necessary to adjust their way of life.
• Life Insurance as Great Form of Investment
You may include life insurance in your investment portfolio as well. Although this is only a secondary purpose of a life insurance policy, the benefits derived from it also bring rewards not only to family members but to the policy holders too. The investment component may only be found in permanent life insurance policies. Term life insurance delivers pure death benefits only. If you would like to balance your investment portfolio, diversifying your investments through signing up for whole life insurance or universal life insurance is a great means of growing your money on the long term. The cash value that permanent life insurance features provide policy holders with the ability to withdraw funds at any point in time. Aside from the fact that the insured can borrow funds from the policy, the cash value may also be a means to pay for the premiums in the future. Although this type of investment does not command high interest rates, you are rest assured that the earnings from such an investment is untaxed, thus making it a more ideal solution than keeping you money in a savings account.
Now that we have identified the primary and secondary purposes of a life insurance policy, it is now time to enumerate tips on how you can save on life insurance policies:
• Determine how much life insurance you need
Perform thorough research, assessment, and evaluation of your current financial situation. in addition, it is best to consider the possible expenses that your loved ones will have to pay off when you die prematurely. If you have limited budget for life insurance, there really is no point in purchasing more coverage than you actually need. This means that if you are only after providing your family with enough money to pay for the mortgage, credit card debts, and college education, you need not purchase permanent life insurance. Term life insurance will be more than able to supply the needed cash for these basic expenses for your family.
• Get into shape
You will need to make the necessary lifestyle changes to get affordable life insurance rates. Generally, insurers provide cheap insurance rates to people in great state of health and wellness. in addition, younger people who choose to take out an insurance policy early on can expect better insurance premium rates too. If you are a term policy holder, you will still need to improve your health status or maintain outstanding health history to be awarded with cheap insurance premiums. To avoid nasty increase upon renewal, make it a point to stay in shape and keep healthy. People who smoke and develop diseases due to unhealthy lifestyle should expect more expensive premiums. It is only by keeping healthy and fit that you can expect affordable life insurance rates time and again.
• Stay away from permanent life insurance products if you are generally healthy
Guaranteed insurability is obtained by people who are having a hard time looking for an insurance provider that can insure them. These people are those that feature deteriorating health condition or those who were unable to pass medical examination- a procedure mandatory prior to application for life insurance. The premiums under this type of coverage are more expensive. There is no need to purchase this coverage if you show excellent and passing medical examination results. You will only nee term life insurance. However if you would like to invest on life insurance, you may still do so but make sure that you do not sign up for guaranteed issue to ensure that you are keeping your monthly premiums within an acceptable range.
• Pay your life insurance premium on an annual basis
Instead of paying insurance on a monthly basis, it is ideal to pay off annually to take advantage of discounts. In essence, the fewer payments you make throughout the life of the loan, the more savings that you will get. By paying annually, you end up paying less overall.