Tips for Shopping for Life Insurance on a Budget
Choosing the best life insurance when you have a limited budget poses a myriad of challenges, yet the importance of coverage requires you to learn the steps to success and choose a policy. Without life insurance, your family is left with the harrowing task of not only burying a loved one but also paying for the funeral, burial, and other fees. No one enjoys talking or thinking about death but preparing for the inevitable is important. The following tips ease the strains many people experience when shopping for life insurance on a budget.
Choose the Right Type of Life Insurance
Several types of life insurance policies provide you with protection. Whole life and term life are the two most popular but very different policies. Learn more about each policy type before proceeding with a coverage purchase.
Decide if you need a policy that builds cash value and if you need a permanent or temporary policy. Term-life insurance works best for individuals seeking temporary coverage that builds cash value. Term life insurance costs less than the price of a whole life policy.
Select the Right Coverage Amount
One of the first questions to ask yourself when selecting life insurance pertains to the coverage amount. Life insurance is sold in policy amounts starting at $10,000. This is the amount the insurance company pays on your behalf in the event of death. Policies go well into the millions of dollars. How much life insurance do I need?
Conduct a comprehensive needs assessment to determine the appropriate life insurance coverage amount. Buying too much or too little coverage wastes money and does not provide the protection that you need. Talk to a professional for additional information and help with this assessment process.
Choose the Best Insurance Company
With the overwhelming number of insurance companies offering policies, confusion sets in for many people shopping for coverage. Which company is the best? Which company offers the best protection at the best price? Choosing a life insurance company that best suits your needs ensures that you do not learn the hard way that not all companies are created equal.
A few qualities a good life insurance companies always provides their customer:
- Costs: Life insurance costs vary from one company to the next. Consider price as one of the top factors affecting the life insurance company selection.
- Reputation: Check out reviews posted online by customers. This insight is valuable and unavailable elsewhere. Word-of-mouth information also provides great details and insight into the company.
- Experience: The longer a life insurance company has been around, the more likely they are to know how things work. They’ll give you a better all-around experience and likely, lower rates, too.
- Financial Stability: Check the financial stability of the life insurance company. You want to know they’ll still be around when you need them!
Kick the Habit
If you are a smoker, kick the habit and add years’ to your life, as well as reduce the cost of life insurance coverage. After five years’ as a non-smoker, many insurance companies give you the same rates as other policyholders rather than a higher risk rate. Once you kick the habit, you also save money since there is a reduced risk of developing one or more of the many health conditions that affect smokers.
Smokers pose a risk for life insurance companies. There is little wonder why policy rates are nearly double for smokers as non-smokers. The benefits of kicking the habit to improve your health and finances and can help you easily find a great insurance company, policy, and price.
Buy Life Insurance When You are Young
Age is one of the primary factors in the cost of your life insurance policy. With this in mind, purchasing a policy while you are young makes sense. The older you get, the more you’ll fork out for a life insurance policy. But there’s more reason to buy a life insurance policy now.
The older we get, the more prone to health problems. These health problems increase the cost of any life insurance policy, although the actual condition heavily impacts the amount of the increase.