Money Saving Tips - Life Insurance
How much life insurance you need or whether you need it at all is a decision that only you and your immediate family can make. There are two types of life insurance. Term-Life Insurance is a just-in-case policy for a finite period of time over which you need protection. This is the kind of policy that makes sense for most people and it is relatively cheap because the insurers know that you are unlikely to claim it.
The other form of Life Insurance is known as 'whole life' or 'universal' and this tends to be very expensive because the insurers expect you to keep it until you die and can therefore be confident that they WILL have to pay out the face amount or death benefit. Life Insurance Policies attract big commissions and are one of the most lucrative financial areas for brokers. If you are looking to set money aside, there are far more effective ways of doing so.
Here are some tips and money saving ideas that may help you reduce your Life Insurance Costs.
- Carefully evaluate whether you really need life Insurance at all.
- Buy only the amount of Insurance you really need.
- Work Policies (policies offered through your employer)are often the most convenient, but it is always woth checking that they are the cheapest option.
- Buy when you are young - it's a lot cheaper then! Also as you get older, other assets and savings tend to negate the need for this kind of insurance.
- Shop around for a deal - If you have high risk hobbies or habits, you may need to check out more specialist insurers
- Use the net cost index to help compare the benefits of one policy with another. The net cost index is a standard way for collapsing the different variables of a policy into one number. The lower the number, the better. Your agent or broker will normally provide these numbers for you.
- Premium discounts are often available at specific levels of insurance. You need to know what these thresholds are and what discounts are applied.
- Check billing options - sometimes insurers offer discounts if you pay annually.
- Term life insurance is the most affordable and cost-effective pure protection available, and it is typically much less expensive than a comparable whole life policy. As the old expression goes - "Buy Term and invest the difference."
- Look for renewal guarantees on term policies.