The price you pay for life insurance depends on your age, your health, and your lifestyle. If you are older, you have health problems, and are a smoker, you will always pay more for life insurance than someone who is younger, healthier, and a nonsmoker. Remember that there are ways to lower your life insurance premiums, even if you fall into a higher-risk category. Following are some simple suggestions for life insurance and term life insurance.
Round up.
Often, you’ll actually pay less for a little more life insurance as you approach multiples of $250,000 in coverage. For example, $240,000 of life insurance coverage might cost $275 per year, while $250,000 in coverage might cost only $260 per year. Find out the rate per $1,000 of coverage, which often drops once you pass a certain level of coverage. This figure will help you determine how to get the most life insurance for the least money.
Consider quitting.
Everyone knows that you’ll save money on your insurance premiums if you quit smoking, start exercising, and lose weight. But you might be surprised to find out just how much you can save. Many insurance companies charge smokers double the nonsmoker rate for insurance (Don’t even think about lying. If you end up dying of a smoking-related illness, your insurance company can opt not to pay your death benefit.). Similar discounts can apply if you lose enough weight to fall into a preferred category.
Forget the riders.
While riders may add value to your life insurance policy in certain situations, many are simply an unnecessary expense. Paying extra money to cover an event that’s almost guaranteed not to happen just doesn’t make sense when you’re trying to cut costs. Additionally, many riders simply provide duplicate coverage once your overall insurance needs are met.
Find out about hidden fees.
You may not realize it, but your life insurance could end up costing you more if you choose to make “convenient monthly payments” rather than paying the entire premium up front. Before you choose a payment plan, compare the single payment price to the total cost of the monthly payments. Do the math, and decide whether the convenience is worthwhile.