When to Buy Life Insurance
- Oct 17, 2016
Buying life insurance is rarely a pleasant experience, but it will provide security for family due to accidental or unforeseen death. For many, the biggest reason for not already having life insurance is the cost, which is understandable. However, it’s time to start seeing life insurance not as a luxury, but as a necessity.
How to save
The best way to be smart with any investment, such as life insurance, is to do your research and understand the options available to you. This is why it’s best to know how to purchase a life insurance that is within your budget.
Term Insurance Policy
There are two basic types of life insurance: fixed-term policies and permanent policies. They are exactly as they sound; a term policy covers you for a specified period of time, while a permanent policy provides lifetime coverage. For most people, term policies are sufficient, especially if it is purchased when the family is most in need of security. This is usually when you buy a home or have a child. Security during this time is essential in ensuring your child has is provided for and has the resources for higher education in case the event of accidental death. Keep in mind when buying a term insurance policy, look for a renewal guarantee. This allows you to extend your coverage when the term concludes (usually at a higher premium), so you do not have to start looking for life insurance all over again.
Age is one of the biggest determinants of your premium when buying life insurance so you should buy a policy at a younger age in order to be locked in with a lower premium.
Buy more, Buy together
See if your workplace offers a life insurance policy; usually when a group buys together they collectively receive a lower premium. Employers may also subsidize some of the costs of your plan and having the payments deducted from your payroll makes it much easier to budget for life insurance. Another way to receive the optimal value is to buy a larger plan. That is to say, premiums for a $300,000 policy is proportionally lower than a $150,000 policy. So instead of purchasing two plans, it would be best to have one policy with the highest amount of coverage.
Take care of yourself
It may make sense for you to buy a guaranteed issue or simplified issue life insurance policy, which do not require a medical exam if you have a history of illness and/or injury. The problem is these policies usually have significantly higher premiums compared to underwritten policies which does require a medical exam. For most, it would be beneficial to submit a medical exam with your insurance application. Most insurance policies also offer better rates for non-smokers and those who prove a healthy, active lifestyle.
Fitting a life insurance policy into your family’s budget can seem like an impossible task, but making room will always be worth it. If you any questions on how you can save on a life insurance policy, click here.
Advice, Life Insurance