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Tips on Saving Money on Term Life Insurance
The following tips will be helpful as you evaluate your life insurance options.
Stay Healthy
Exercise and stay healthy. If you are under the care of a physician and receive ongoing medical treatment, expect to pay higher insurance rates.
Don't Smoke
Smokers can expect to pay twice the premium as non-smokers! Even if you occasionally smoke a cigar, be forewarned that you will not qualify for non-smoker rates. Although, depending upon the insurance company and its representatives, you may be able to negotiate your way around it.
Stay Away From High-Risk Sports
High-risk sports such as sky diving, mountain climbing, hang gliding, flying, hot air ballooning, auto racing and motor biking are examples of sporting activities which are not viewed favorably by standard insurance companies, and chances are death from one of these activities will not be covered. Consequently, you will probably have difficulty finding affordable insurance if you participate in these types of activities.
Compare Historical Rates Of The Company
Compare the actual historical rates of insurance companies vs. their projected rates over the last ten years. This information can be especially important if you are considering an annually renewable term policy where the premiums increase each year. With this type of policy, you are betting that your premiums over a five or ten-year period will be less than if you purchased a level-term policy over the same time period.
Go It Alone
Purchasing life insurance through your employer may be convenient, but it isn’t always the least expensive method. Under corporate plans, everyone has to be covered no matter how healthy, so it’s no wonder the premium is more expensive. On the other hand, if your employer is covering the cost, why not take it? Be sure to ask how your coverage is affected if you leave the company.
Challange Drug Test Results
Yes you can! If you feel you have been the victim of a drug test with a false positive result, don’t be afraid to confront your insurance agent. If you are rejected for life insurance it will become a permanent part of your record, and the next time you apply for insurance you will be asked whether or not you were ever denied coverage by an insurance company. Demand a second test.
Consider Annually Renewable Term Vs. Level Term
If the insurance company you are considering is meeting or beating their rate projections, consider going to an annually renewable term policy where you automatically renew but pay the prevailing rate at the time.
Riders Are Not Always The Best Deal
With an "Accidental Death" or "Double Indemnity" rider, at upwards of $2 per $1,000 of coverage, an insurance company promises to pay your survivors double the face amount of the policy if you die in an accident. So if you own a $200,000 policy and die in a car accident, your survivors would get $400,000. It's probably more likely, though, that one will die from an illness than
an accident.
A "Waiver of Premium" rider can cost close to 10% of your annual premium. Under the terms of this rider, your insurance company will continue to make your premium payments when you are disabled and unable to pay the cost yourself. If you already have disability insurance that includes coverage for payment of your life insurance premiums, than this rider is not necessary. But if you don't have disability insurance, now may be the time to get a quote.
A "Dependent" rider extends some life insurance coverage to your spouse or children and is usually quite expensive. If your spouse needs protection, you should consider taking out a separate term policy because the cost per $1,000 of death benefit is usually less expensive.
Buy As Much As You Can Afford
If you are thinking about buying $175,000 in coverage, why not increase the amount to $200,000? The premium difference will be quite small. As you increase your limit of life insurance, the average cost per $1,000 of death benefit decreases. If you have already taken a medical exam, find out how much further you can increase the limit without requiring a second exam. If you request an increased limit within 24 hours of receiving your results, you might be able to get it accomplished quickly.
The Best Of Both Worlds
If you’re young and want permanent insurance such as whole life but can’t afford the premiums, consider blending a permanent policy with a term
life policy.
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