Whilst a ‘cheap’ policy might not be what you are looking for when it comes to insuring something as precious as your life, the good news is that there are many ways to cut costs, without compromising on getting the level of cover that you need.
Shopping around is crucial, whether you are taking out life insurance to protect a business or have decided that now’s the right time to think about getting cover due to starting a family of your own. Whatever your reasons for getting life insurance, there are always good ways of driving the cost of your policy down.
4 Tips for Getting the Lowest Life Insurance Rates
1. Avoid over-insuring Yourself
Some people make the mistake of getting cover that is not necessary, which can be one of the biggest reasons why you end up paying more than you need to for life insurance.
Also, it can leave your loved ones in a sticky situation if they do end up needing to claim.
Bear in mind that the purpose of life insurance is to make sure that your family is comfortable financially in the event of your death; they don’t need the equivalent to a lottery win.
So, work out exactly how much they would need – and take your policy out for that amount.
2. Choose the Right Kind of Cover
There are several different types of life insurance policies, and with a range of different options to choose from, so it can be easy to get overwhelmed.
However, you must spend some time researching each different policy so that you can be sure that you have the right option for you.
Whole life insurance is the priciest type of policy because it’s guaranteed to pay out eventually.
On the other hand, term life insurance will only cover you for the duration of the policy; the price will be set according to the likelihood that the insurer will need to pay out during that time.
This is a common option and can often be much cheaper; you can choose to be insured until you’ve repaid your mortgage or until your children are adults, for example.
Or you can use it to provide cover if you’re going to be in a particularly dangerous situation for a while – for example, this life insurance for police officers is a good choice if you need insurance whilst you’re on a long and risky job.
3. Look for Guaranteed Premiums
Typically, the options that you will be offered when it comes to life insurance will be ‘guaranteed’ or ‘reviewable’.
Reviewable premiums might seem tempting at first as they are likely to be cheaper initially, however, they can fluctuate over the length of your policy due to several factors and you could end up paying much more.
On the other hand, a guaranteed premium will stay the same regardless of your age, health conditions, career changes and more.
4. Allow Your Level of Cover to Fall
As time goes on, you will hopefully need less and less life insurance cover. Think about why you need it right now.
Maybe you have a young family, a big mortgage and some debts that will all need to be paid for if you were to die tomorrow, so you’ll need a policy that can easily take care of all that.
However, as time goes on and you repay your mortgage and debts and your children get older, you will hopefully need less of a payout for your family if you die, so arrange a decreasing term life insurance policy – the lower risk of a big payout for your insurer will bring your regular premiums down.
Did you find these tips helpful? We’d love to hear how you got the right life insurance for you in the comments below.