The key to finding a cheap life insurance policy is to determine, first, if you even need a life insurance policy, and second, what type of insurance policy to purchase. To begin, individuals with no dependents (a dependent is a member of your family or household that you provide at least half of their support) may not need life insurance policies after all.
How To Tell If You Need Life Insurance
The easiest way to tell if you need life insurance or not is to ask yourself this question, “If I died today would my passing away put someone in a financial bind?”That “someone” could be a child, a spouse, a family member, a business partner, or any other number of people. If the answer to that question is “Yes” then you need life insurance.
The majority of individuals do in fact need a life insurance policy. In order to make the policy worthwhile, make sure to find a policy that insures losses you cannot replace, such as personal income. Some life insurance policies only cover specific losses of life, such as particular illnesses, plane crashes, etc. You will be better off to pay a little bit more to get a policy that covers any loss of life.
How to Find Out How Much Coverage You Need
When searching for an insurance policy, many professionals suggest finding the least expensive policy that covers at a bare minimum five to ten times your annual income. There are a variety of life insurance calculator tools available on the Internet that can help you determine what amount of policy coverage best suits your individual situation.
The Difference Between Term Life And Whole Life
It is important for life insurance policy seekers to understand the difference between term life insurance and whole life insurance, because there are significant cost differences between the two. First, term life insurance provides a policy with coverage for a limited time period (the “term”). Examples of this term might be until children go to college, or until an individual retires. The main idea of term life insurance is that no cash value is built and at the expiration date, a person may drop the policy or choose to continue coverage. Any accidents or losses of life during the coverage period are paid to the beneficiary of the insured individual to use for financial obligations.
Term life insurance is very good because it is one of the most inexpensive ways to receive considerable coverage in comparison to the small premium amounts. However, some people find term life insurance undesirable because if no claims are made during the policy coverage period, they receive no compensation paid back in return. These types of people will be more satisfied with whole life insurance, which has ongoing coverage and contributes to an investment account which will pay a lump sum to the beneficiaries upon death or sometimes diagnosis of a terminal illness. In trying to find a cheap policy, however, one must remember that whole life insurance is generally more expensive than term life insurance so it should be considered only if the additional benefits of the investment account are more important than the cost-effectiveness of a term life insurance policy.
Ways To Save Money On Life Insurance Coverage
There are several things that you as a consumer can do to minimize your life insurance policy costs. The first and perhaps the easiest thing to do is to improve basic health qualities that might cause an insurer to increase your premiums. For example, life insurance for an individual who smokes can be two or three times more expensive than that for non-smokers. Cutting this habit can contribute greatly to getting a cheap policy. It’s also worthwhile to get a health physical which will insure you have no existing illnesses that could make the insurance company increase your premiums considerably.
Once you have narrowed down your options to a few plans, there are several more steps to take that will lower your costs. First, get a joint life insurance policy if you’re married rather than two separate individual policies. Joint policies are often offered at a discount in comparison to life insurance for individuals.
Another way to make your policy cheaper is to make your coverage period shorter. If you won’t need lifetime coverage, you could choose five or ten years’ coverage instead, which will lower your costs. The last way to save on your life insurance policy is to agree to lower daily benefits (this is applicable only if you are considering purchasing a life insurance policy that is a combination policy of long term care insurance and life insurance benefits such as the Lincoln MoneyGuard). If you eventually need nursing home care, for example, if you choose a lower daily cost coverage (benefit), you will end up with cheaper premiums in return.
Overall, there are many ways to save money on a life insurance policy. Your best bet is to determine whether you need whole life insurance, or can get by on term life insurance. Taking extra steps in choosing specific policy details can lower premium costs significantly, while not giving up too many benefits in the process. It’s important to research many life insurance companies before deciding on one, in order to find the cheapest policies with the benefits you need.
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