Your life insurance policy provides financial peace of mind to your family after you’re gone. While it’s an important part of your estate planning, the premiums can be expensive. Maximize your policy with these tips.1. Buy When You’re Young
Young people enjoy the best life insurance premium rates because of their age and good health. Instead of waiting until you’re married or have kids, buy a policy when you graduate high school and lock in low rates.You can also purchase a whole life insurance policy. It comes with a steady premium and provides coverage for the rest of your life, no matter what happens with your life circumstances or health.
2. Buy a Term Policy
This type of life insurance covers you for a set number of years. It’s the life insurance most people choose when they are the primary caregiver for someone, including an aging parent or young children. While it pays nothing if you do not die before the term expires, it’s an affordable option and gives you the peace of mind you need.
3. Quit Smoking
Life insurance premiums are significantly higher for smokers than for non-smokers. That’s because smoking causes a variety of health problems, lowers life expectancy and increases the probability that the insurance company will need to pay your life insurance claim.
Kick the habit and be smoke-free for 12 months to get cheaper life insurance rates. If you had a life insurance policy as a smoker, contact your insurance company to get the discount you deserve for your hard work.
4. Cover Only What you Need
Most financial advisors recommend that life insurance policies provide at least 10 times your annual income. This amount can pay off the mortgage and cover outstanding debts, final expenses, schooling and daily living expenses. You may not need this much coverage, though. Maybe your mortgage is paid off or you don’t have children.Take time to calculate exactly how much life insurance you need. Then buy a policy for that amount. You’ll end up eliminating unnecessary coverage while still having enough to meet your family’s needs.
5. Buy Separate Policies
If you purchased a joint policy for you and your spouse, consider switching to separate policies. This way, you can adjust your payout to match different earnings. The premiums could be cheaper, too.
Purchasing life insurance is one investment you definitely want to make. Be sure you’re getting the most out of your policy when you follow these tips. Discuss your needs with your insurance agent, too, as you give yourself and your family peace of mind.
