Getting life insurance in the US comes with many benefits. It covers funeral fees, inheritance taxes, mortgages, and other unexpected obligations. Life insurance is an excellent investment to support your family during your death. Unlike other investments, life insurance offers a guaranteed return. However, life insurance is not a free ride. Any financial adviser will tell you it can be expensive. So how do you get the best coverage at the best price?
1. Buy life insurance when you’re young and healthy
You’re more likely to get affordable life insurance when you’re young and healthy. Insurance companies use your medical records to determine if you’re a risky investment. If you have any health problems, it can impact your coverage and premiums. Your rates may be higher if you have pre-existing medical issues like asthma, high blood pressure, or heart disease. If you get life insurance when you are young and healthy, your medical history is clear, and insurers are more likely to offer competitive rates.
2. Pay premiums annually
Paying premiums annually instead of monthly is less expensive because it spreads the cost over 12 months. That’s why you should consider this payment method. It’s the cheapest way to pay for your policy and it protects your premiums from annual rate increases. A one-time payment gives you leverage to negotiate your policy’s terms. You can get a more significant death benefit, higher coverage limits and lower premiums. It also saves you from defaulting on premiums due to unavoidable financial constraints such as emergencies, job losses, and taxes.
3. Don’t buy more coverage than you need
It’s tempting to buy more coverage than you need because it’s affordable, but think about it. You’re paying for a product you may never use. The financial burden of a surplus policy can make it hard to plan for your family’s future. So how much life insurance do you need? First, take into consideration your dependents. If it’s more than your dependents will need, you’re better off with less coverage. Second, it depends on your age. If you’re young, you can buy extra coverage for your spouse and children. If you’re older, consider a smaller amount of coverage if you don’t have dependents. Lastly, it depends on your lifestyle. You won’t need as much coverage if you or your dependents are healthy. However, consider more range if you’re unhealthy and have various medical conditions.
4. Stick with term life vs. whole life policies
Whole life insurance is more expensive than term life insurance but provides greater coverage. Most young people will find it more affordable to get term life insurance. It’s the cheapest way to get life insurance because you only pay for a few years. Whole life insurance is a permanent policy that provides you with cash value. Although whole life insurance can provide additional benefits, term life makes more sense for most people. That’s why you should consider this type of insurance and avoid whole life policies if you’re young and healthy.
5. Shop around for the best rates
The rates you get are based on your health, age and other factors. You can get higher rates if you have medical conditions or are older. You can also get better rates by shopping around because insurance companies have different criteria for determining premiums. Doing research for the best rates makes the process of buying a policy less stressful. It also saves you time and money. Use free quotes from companies that have lower rates. After getting quotes from different insurance companies, compare terms and conditions to find affordable premiums. It is worth the effort because you’ll get the coverage you need without overspending.