Many customers looking to purchase a life insurance policy, want a plan that gives adequate coverage without overpaying. Policies premiums are based on historical data that actuaries determine by solving complex algorithms. The base premium numbers are determined by risk categories which includes the applicants current health, medical history, habits, age, hobbies, credit score, driving record, etc. Policy premiums will still vary with applicants that are placed in the same group. Some common ways to save on life insurance are as follows:
Don’t smoke – When insurance companies determine their risks for life insurance applicants, the first class they determine is if the applicant smoked. Obviously there has been quite a few cases where people have smoked a pack a day and lived past age 100. That sample size is so small that it doesn’t effect the entire population that actuaries deal with. Underwriters will want to know if you smoke or have smoked at some point in your life. This one habit alone, can increase or decrease the applicants premium by a large number. Visit Us lifeinvestmentinsurance.
Purchase a plan that fits your coverage needs – Some customers purchase cheap policies, but then end up regretting it down the road. Sure, many policies are convertible, but may incur fees or additional charges if the plan is converted. Purchase the correct life insurance policy the first time around. This is done by talking to a good insurance agent and asking the right questions. The agent will determine what is needed for your financial situation and help you understand what type of life insurance policy fits you best. There are many different products ranging from term to permanent insurance. Common coverage for life policies are recommended to 5-10 times your annual income.
Save in the long run by purchasing early – More often than not, people wait till later in life to purchase life insurance. If you have the funding and ability to pay a life insurance premium, purchase it when your younger. Locking in rates at an early age will save you money in the life of your policy.
Pay premiums annually and automatic bill pay – After applying and getting accepted for a life insurance policy, there are options on paying for your coverage. Payment options vary slightly with each insurance company, but most insurance companies will offer a discount if installments are paid annually. This saves the insurance company money by investing the money as the receive it, rather than waiting for smaller payments to come in monthly. Insurance companies make a healthy profit on interest rates and will pass the savings on to the consumer if it’s paid entirely up front. More insurance companies now are offering automated bill payment, which may offer around a 1% discount.
Look into coverage “bands” – Every insurance company offers different prices for different amounts of coverage. “Bands” of insurance are policies priced according to coverage. Sometimes, an insurance company may offer a lower rate for a certain amount of coverage. Depending upon the amount of coverage you need, it may be cheaper or worthwhile getting more coverage.