How Can I Save When Getting Life Insurance
If the thought of purchasing your first life insurance policy or switching to a new policy seems stressful, you aren’t alone. The topic of life insurance is not an exciting one to learn about. But if you have dependents who rely on you to support them, now is the best time to educate yourself and purchase coverage.
One of the biggest fears that people face when deciding to buy life insurance is dealing with the inevitable- you will die one day. Nobody can predict when that day will come but if you do not have life insurance, it may be too late to financially take care of your loved ones in the event you die suddenly.
A common mistake when thinking about the right amount of coverage to purchase is trying to arbitrarily decide how much you should be worth if you die.
A professional who specializes in selecting a policy would be an excellent person to consult with first. Factors to consider when determining how much coverage you need and how much it will cost include: your age and earnings, the age and financial situation of your dependents (including spouse, children) and your health.
As a rule of thumb, you should have enough coverage based upon your annual earnings x 10. So, if you earn $75,000 per year, you would likely be secure with $750,000 of coverage. Keep in mind that if you have more than 3 dependents (spouse and 2 children) then you would likely need more coverage. Again, discussing this with an insurance specialist will help determine the appropriate amount.
Also, if you have young children and you die, their status of being financial dependents will be lengthier. If your kids are both in college, then their ability to support themselves financially is a lot close than if they were young.
Your annual life insurance premiums will be based upon your age and your health. Simply put, the younger and healthier you are, the lower your costs will be. Statistics show that your odds of dying at 35 are far lower than at 65. Keep in mind that if you are a 35 year old with serious medical conditions, you will be far more for coverage than a healthy 35 year old. Obesity, diabetes, chronic illnesses and smoking all make you a higher risk and therefore your costs will be higher. Regular exercise, healthy eating and being proactive with any health conditions will not only increase your odds of living longer but will lower your life insurance premiums.
Even if you live with a chronic health condition, you can spend considerably less on life insurance by looking for a company that specializes with higher medical risk individuals. Quite often, you can save as much as 50% off your annual life insurance costs by working with an insurance company that will identify your risk more accurately and specializes in insuring people with the same type of illness.
Taking the time to calculate exactly how much insurance you need and how much you can afford to spend will provide peace of mind for both yourself and your loved ones.