Life insurance is taken out by individuals who want to make sure their families or dependents will receive cash benefits after they die. However, some people are having to pay more than others for the same amount of coverage. Below are some handy tips and tricks to ensure you’re not paying more than you must.
Simple Ways to Lower Life Insurance Premiums
Below are the 6 simple ways to get lower life insurance premiums.
Insure Yourself When you’re Young
The younger you are, the less of a health risk you are in the eyes of insurers, so it’s important to get insured when you’re relatively young. This will directly translate into lower insurance premiums, so you won’t be paying more than necessary down the line.
Stay Healthy and Out Of Danger
Keeping healthy can help you secure lower premiums. For example, insurers look for healthy individuals, and can reduce premiums by up to 50% for non-smokers, so it’s a good idea to quit smoking if you want to secure a decent deal.
Similarly, it’s important to watch your body mass index (BMI), as this is a general indicator of good health. Leading a hazardous lifestyle (such as working with explosives or regularly chasing an adrenaline rush) is also likely to increase premiums, so bear this in mind too.
Honesty is always the best policy, so it is important not to lie to your insurer about your overall health. If you lie about or conceal a smoking habit, you will more than likely be found out which will ultimately result in no pay-out.
Check Your Employee Benefits
If your employer offers a life insurance policy through group life insurance, for example, it may be for a significant amount or a multiple of your annual salary. As a result, your additional life cover requirement might be less, and so could the premiums you pay for the balance.
Choose a Policy That’s Right for You
A ‘whole of life insurance policy is, unsurprisingly, in place for your whole life, making it more expensive in the long run, as it is guaranteed to pay out at some point. Term insurance, on the other hand, can offer cheaper premiums, and this option may be better suited for you depending on your circumstance. Assess your situation and choose a policy that best suits you.
Reduce the Term of Your Existing Policy
We’ve established that longer terms equal greater costs, so it may be wise to review your existing policy to keep costs down. If you only need life cover for your mortgage, for example, you might want to consider insurance for the remainder of its term, or just while your children are still young. Re-evaluating an existing policy can help lower your premiums.
It Doesn’t Have To Be Stressful
The concept of life insurance is stressful for some and is something we perhaps don’t even want to think about, let alone confront. It is, however, a mechanism that is used to ensure the financial security of our loved ones after we die, which is why it is so crucial to understand its mechanics and how you can negotiate lower premiums so that your policy is correctly tailored to you and your beneficiaries at a reasonable price.