How to Reduce Life Insurance Costs

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By Chris Carruthers
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Article Rating: (10 Ratings)

Reduce Life Insurance Costs

With all of the belt tightening going on its time to take a look at life insurance costs. A few simple steps could save hundreds of dollars per year in premiums. Reduce your premiums and use the savings to improve your quality of life!

Difficulty: Easy

Instructions

Things You'll Need:

Copy of your current policy

Step 1

Only buy term life insurance. Any financial planner will tell you that life insurance carrying a cash value such as whole or universal life is a bad investment. The real rates of return are pitiful compared to a long term investment in the stock market. Term life is pure insurance, without the investment. If you've been paying for cash value insurance, you should cancel it and invest the cash saved up in the policy.
Step 2

Shop for better rates every one or two of years. Just like car insurance, rates vary a great deal from one company to the next. Make sure you're comparing apples to apples though. There are different types of term life insurance. The annual renewable variety can increase every year. Level term life stays at the same rate for a specific term. Common terms are 10, 15, 20 and 30 years.
Step 3

Stop smoking. Though damage exists from your old habit, quitting now will statistically add years to your life and qualify you for lower life insurance premiums at the same time. Let your insurance company know that you have quit and ask them to reduce your premiums.
Step 4

Existing health conditions will affect your rates. If you obtained your life insurance while you were healthy you probably won't get a better rate elsewhere. But if you're applying for coverage with an existing condition it really pays to shop around, since life insurance companies view diseases differently. Depending on the life insurance company and your particular medical condition, you may be able to get lower rates by demonstrating that you are under doctor supervision and showing positive results. The life insurance company will let you know if they have specific questions about your condition.
Step 5

Consider reducing coverage. Evaluate your financial responsibilities. What would it take to pay off debts and provide for the needs of your dependents? The amount of insurance you require should dwindle as your children leave the home and as your retirement savings grow.

Comments

roycebachand said

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on 12/10/2009 Great article I rated it 5 stars.Really helpful information.

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