It’s a challenge we all face: getting life insurance can secure the future of our loved ones, and provide direct benefits in the present. At the same time life insurance is yet another expense to try to carry on already burdened budgets. Finding a plan that provides what you want at a price you can afford is serious business. You are not the only one to ask yourself, “How do I save money on life insurance?”
The first step is to decide what form of life insurance you are looking for. Life insurance is commonly available in two basic forms: term life insurance and permanent, or whole life insurance.
The two forms are very distinct. Term life is insurance purchased for a specific term of time. If you purchase term life you are gambling outright that you will die during that term and that your heirs will inherit the benefits of your insurance plan. The insurance company is betting you will not die, and that at the end of the term they will have gained the full cost you paid in without having to pay out anything.
Whole life insurance is somewhat different. In whole life insurance there is a guaranteed pay out on death, a steady annual premium payment to maintain the policy, and ownership of the accumulated money in the insurance account. Whole life insurance policies function far more like savings accounts and less like a form of gambling.
However whole life often costs more. Because payout is certain and ownership of accumulated value is vested in the purchaser, not the company, the insurance company must make its profit in pricing the premium higher than the likeliest payout. Statistical figures determine when you are most likely to die, and the resulting actuarial tables allow the insurance company to set a price somewhat higher than that you would pay in over your predicted life.
Term life, lacking a certain payoff, can be much cheaper, and is often the choice of younger individuals who are simply trying to ensure that, if they do die, there is money to meet the basic requirements of closing out their lives or providing for their families in the short term.
To determine which form of insurance is best for you, and to then decide what specific programs you choose, you have to do your homework carefully. Fortunately there are many resources in print and online to help you navigate the maze of information.
First decide which form of life insurance you want. Then start checking out specific companies, studying the policies they offer: online research is superb in this instance, giving you access to everything from thumbnail descriptions to occasional access to the actual contract boilerplate.
Once you have narrowed your choices down, it’s time to start requesting quotes. You can do this live, by phone, fax or paper post, or you can do so online. Using both company websites and online search engines that perform comparison shopping will let you determine which company and policy offers you the result closest to your needs, at the lowest price available.
To get started with this right away use the form below for free:
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If you are having trouble deciding which type of policy would best suit you, you might need to ask yourself the following questions – how much will you need for funeral expenses and burial costs? Do you need to pay off any debts, mortgages and estate taxes? Do you have children whose education you have to look after or any dependents whose expenses are your responsibility? How much money do you need to look after your family in your absence? How much does your income contribute to the household finances? Once you have calculated an estimate with the professional help or by using one of the many online calculators available, you will reach a figure that will help you decide how much coverage you should opt for.
Answering all these questions will also give you a good idea about your financial priorities. Based on this and the personal decision on how much you are willing to pay for a policy, you can then make the choice between a term life insurance policy and whole life insurance.
Denise at AccuQuote
Disclaimer: I work for AccuQuote and this is my personal opinion.