How to Save Money on Term Life Insurance

Term life insurance is a popular form of life insurance because of its low premium, as well as the opportunity to invest the savings in premium. Even though it is relatively inexpensive, you can still save even more without lowering your coverage. Read on to learn how.

Difficulty: Easy

Instructions

1. Get lower rate by buying your policy while you are still young. The younger you are, the lower your life insurance rates will be. You are also more likely to be of good health, which further helps keep your rates low. What's more, these rates will be locked in for the entire duration of your policy term. The earlier you buy your term life policy, the more you save in premiums.

2. Beware your "half" birthday. While term life insurance rates are based on your actual age, some insurers will increase your rates as early as six months before your birthday. For example, if the rate for a 40-year old is $50 a month, and that of a 39-year old is $40 dollars a month, then you will be charged the higher rate if you are 39 years and 7 months old. Once again, the earlier you buy your policy, the more you save.

3. Find out if the insurance company offers a discount if you pay in full or if you opt for monthly billing via EFT (Electronic Funds Transfer) directly from your bank account.

4. Do not buy more coverage than you need. Financial planning experts recommend buying coverage amounts that amount to up to ten times your annual income. By choosing an appropriate coverage limit, you won't end up paying more than you have to.

5. Choose a term that is best suited to your individual needs. Term life policy periods range from 5 to 30 years. While a 30-year term policy would appropriate for a 25-year-old or for someone with a 30-year mortgage, a 10-year policy is more appropriate for a 70-year-old. Evaluate your needs and buy a policy that is suited for you, so that you don't end up paying more than you have to.

6. Review your term life insurance policy every three or so years. If your life situation has changed, your rates may be lower. Say, for example, if you have stopped smoking during that period, your rates can be substantially lower. You may also need to review your coverage limits determine if you need more or less coverage. Take time to shop other insurance companies at the same time as well.