When choosing the right life insurance for you and your loved ones, the process often starts with deciding whether you'd like a term life or whole life insurance product. Here are the basic differences.
If you're buying term life insurance, chances are you're out to save as much money as possible. Who can blame you?
Let's face it, buying a term life insurance policy hardly ranks among one's favorite purchases. Most people buy term life insurance for peace of mind, because it's the right thing to do and to help care for loved ones.
With that in mind, here are some tips on how to get the best term life insurance and save some cash (to spend on what you'd really rather buy or do).
To save money buying term life insurance policy, be sure to ask about more coverage, not less. Some companies offer price breaks, also called milestone discounts, for higher coverage amounts. For example, you might get a break for getting $250,000 in coverage instead of $200,000. Or you might save by getting $500,000 instead of $450,000. So even if you figure out that you only need a certain amount of coverage to protect your loved ones, it may be worth asking how much a higher level of coverage costs. You could end up saving money buying a term life insurance policy, while getting your loved ones more protection.
With a renewal guarantee, you're guaranteed the chance to renew your term life insurance policy and you won't need to retake the medical exam. It's true that your premium will be based on your current age -- not the age you were for your initial term -- but you won't have to start the shopping process all over again for buying term life insurance. This is particularly valuable if your health has declined. Trying to buy term life insurance from scratch with poor health could mean that you won't qualify for coverage or that you will pay a much higher premium.
Some insurers allow you to pay monthly, quarterly, semi-annually or annually. Paying annually can often save you money. Also, there are often fees for monthly billing (these are called "fractional premiums"). It might pinch to make an annual payment, but it's worth asking about in order to save money.
Term life insurance generally is less expensive when you are younger and in relatively good health. That's not generally the time in life when most of us think about buying term life insurance, but actually, that's the best time to save money. Waiting until later in life when you're a bit older and maybe dealing with some medical issues can drive up your premiums and may even prevent you from buying term life insurance at any price.
Are you a sky diver? Underwater welder? Pilot? If you have a high-risk hobby or occupation, be sure to shop different carriers when buying term life insurance. Carriers rate risks differently, so you might be able to find one that charges less for high-risk activities. The appropriate term life insurance will offer a good price for your lifestyle.
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