If you are concerned about the financial well being of your family after your death, purchasing a life insurance policy is a smart decision to ensure your family is taken care when you are no longer with them. The price of the policy ultimately varies based on a few different attributes, including the potential payout of the policy and the length of its term. Here are a few ways you can make your life insurance policy as affordable as possible:
1. Improve Your Overall Health
When you purchase your policy, the insurance company will use your current health to determine the price of your annual premium. Some companies simply ask a series of question to determine your health status, while others complete an in-person physical that requires bloodwork. Regardless of which method your company utilizes, it is important to be as healthy as possible in order to procure the best rates.
If you smoke or use tobacco products, stop using them as soon as possible. Nearly every insurance company charges more for individuals who use tobacco products. The longer the period since you last used tobacco products, the more affordable your insurance premiums will be.
Try to achieve a healthy weight. Many insurance companies calculate your body mass index (BMI) to decide if you are overweight or obese; they then use this information to calculate your rates.
Make sure that any chronic conditions are under control, either via lifestyle changes or the appropriate prescription medication.
2. Purchase Term Life Insurance Instead of Whole Life Insurance
Whole life insurance makes sense for some customers. If you are concerned about future insurability or you want an insurance policy that accumulates a cash value, whole life insurance can help you achieve both of these objectives.
However, the perks of whole life insurance mean that the insurance premiums are usually more expensive than comparable term life insurance policies. To minimize your insurance costs, stick with term life insurance. Term life insurance policy does not accumulate a cash value. When you buy the policy, you decide how long you want the policy to be in effect.
Policies with longer terms are usually slightly more expensive than those with shorter terms. However, this is one area that you don't want to skimp on. If you know you need insurance for 30 years to keep your family protected, the small increase in your premium is worth it to protect your family's financial well being.
3. Bundle Your Insurance Products
If possible, shop for life insurance with the same insurance broker who sold you your home, renter, or auto insurance policy. Many insurance companies offer a discount to customers who have all of their policies with them.
In the event that your insurance broker doesn't offer a bundling discount, be prepared to shop around with companies who do offer this discount.