Affordable Life Insurance – 10 Small Tricks for Big Savings on Life Insurance
Saving thousands of dollars over the life of your policy is easier than you think. The right agent will know exactly how to save you money while still finding you a policy that best fits your needs. We have compiled a list of 10 little tricks that can be used to save money on your life insurance policy. These tips will allow you to make life insurance more affordable. Remember, most life insurance policies last a long time so any amount that you can save each year can add up to huge savings over the long haul.
Shop Around – Using an independent agent to shop your coverage can save you thousands over the life of your policy. An independent agent will be able to shop multiple carriers so that you can get the best policy based on product features, cost and underwriting standards.
Pay Your Premium Annually Instead of Spreading Them Out – When paying your yearly life insurance premiums, you have the choice of paying your premiums annually, semi-annually, quarterly or monthly. Many people like to spread their yearly premiums out by using an option other than annually, but the insurance company is going to charge you extra for this convenience. Choosing any mode of payment other than annual will almost always cost you more.
Buy Annual Renewable Term – If you need life insurance for a short period of time, annual renewable term is a great temporary option. The rates for these policies are inexpensive when you are young but increase each year. They should not be held for the long-term but could offer more savings than a 10 year term policy in some cases.
Get a Fully Underwritten Policy – The convenience of a no medical exam policy might be tempting, but these policies cost much more than fully underwritten coverage. A paramedical exam only takes about 20-30 minutes and can be done in the convenience of your home. If you are healthy, getting a fully underwritten policy versus a no medical exam policy could save you thousands over time.
Don’t Add Unnecessary Riders – Riders are additional features that can be added to your policy for an additional cost. Some riders might offer benefits that are worth the extra cost and some might not. Before you start adding multiple riders to your policy, make sure they make sense for your situation.
Get a Rate Review if Your Health Improves – If you purchased a life insurance policy in the past when you had health issues or unhealthy habits, you might be able to have your rates reviewed and lowered by your insurance company if your health has improved. Most insurance companies will want to review your medical records from the past couple of years and will also require you to take another paramedical exam before they make a decision.
Buy Coverage When You Are Young and Healthy – This seems like obvious advice, but many people put off purchasing coverage for one reason or another. Buying when you’re young and healthy, assuming that you need coverage, will save you quite a bit over the long haul. If you put off buying coverage and develop health issues, you could be in real trouble. A policy at that point could be unaffordable or worse, you could become uninsurable.
Backdating a Policy – Most insurance companies use “age nearest” rather than your actual age when determining your age for premium rates. So once you hit your half birthday, you are automatically considered a year older by the insurance company and pay premiums based on a higher age. The good news is that life insurance companies will let you backdate your policy up to 6 months so that you can lock in a lower premium. You will have to pay for those months that you actually did not have coverage, but it could definitely be worth locking in the lower age over the long haul. Your agent should be able to show you how much will be saved by backdating.
Layering Coverage – This strategy involves buying multiple policies for different terms periods. For instance, a forty year-old with a preferred health rating could by a 30 year term policy with a $1,000,000 dollar death benefit for $1,474 per year from a major insurance company. If they used a layering strategy, they would instead buy a 15 year – $500,000 policy for $349 and a 30 year – $500,000 policy for $769 from the same company for a total of $1,000,000 of coverage. Using the layering strategy, premiums would be $1,128 for the first 15 years and $769 for the last 15 years. This would allow for higher coverage to service immediate needs like the cost of raising a family and income replacement. Once those immediate needs have diminished, they would still have $500,000 coverage for any long-term obligations. This should only be done if you are comfortable reducing your coverage over time.
Use Your Group Policy – Rarely is using an employer sponsored group policy better than purchasing an individual policy. But for people with certain health issues, it might be the most cost-effective coverage. You should always compare the cost of group coverage with an individual policy first to see which offers the better value. An independent agent should be able to shop your case and give you an idea of what you would pay for individual coverage.
We can save you money on your coverage. We would welcome the opportunity to give you a free needs analysis and present multiple coverage options to you. We have access to over 40 insurance companies and will use all of our resources to get you the best coverage option available. Please feel free to give us a call at (888) 687-9444 or email us at info@archstoneagency.com if you have any questions.
Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients. We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage. Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com. You can also visit our website at www.archstoneinsurance.com.
