Life insurance covers your funeral expenses after you die so that the financial burden doesn't fall on your family. All you pay are the premiums. However, if you're not careful, the premiums can add up to a higher figure than the payout. Learn how to save money on life insurance to ensure you make the most out of your policy.
1. Buy early
Life insurance premiums increase with the customer's age.
Forbes detailed the average life insurance premium based on age, gender, policy amount, and policy length to demonstrate the jarring difference in cost based on age. A 30-year-old male with a 10-year policy of $250,000 pays an average premium of $132 a year. A 50-year-old male with a 10-year policy of $250,000 pays an average premium of $324 a year.
Younger policyholders present much less of a risk than someone reaching the final decade or two of their life. Young people can get life insurance for cheap since the insurance company doesn't expect to pay out on it.
2. Stay healthy
Age isn't the only factor that goes into determining life insurance premiums. Another major consideration is health and lifestyle. Young people and seniors with preexisting conditions will pay more for coverage if they can get coverage at all. Premiums will also increase if you live an unhealthy lifestyle that includes tobacco, saturated fats, and alcohol.
To reduce your premiums, prove your healthy lifestyle with regular doctor checkups and a gym membership. Ask your insurance adjuster which items qualify for a healthy lifestyle discount and apply as many as you can.
3. Pick the right policy
Two types of policies are term life insurance policies and whole life insurance policies. A term life insurance policy covers the policyholder until the expiration date, at which point the policyholder will have the option to apply for a new policy. A whole life insurance policy is a permanent policy, meaning it covers the policyholder until death. The policyholder pays premiums until they pass away, but the value of the policy never changes. If someone lives a long life, it can end up costing more than expected.
4. Take advantage of discounts
Many life insurance companies offer discounts for special situations. One popular discount is a bundle discount that lowers the premium when you bundle with other policies through the same company. Insurance companies may also discount the premium if the customer pays for the year in full. Not only will it lower the cost, but it means you won't have to worry about your life insurance bill for another 12 months.
When you get life insurance at a good price, it can help your family during the tragedy. Over 50% of American adults have a life insurance policy, and it's often worth it for the peace of mind.
To learn more contact a life insurance agency in your area.