Tips For Finding Affordable Term Life Insurance
In this post we will discuss tips for finding affordable term life insurance coverage but first let’s discuss why you need life insurance to begin with. Basically in this world that we live in… nothing is guaranteed and anything can happen at any moment which is where life insurance comes in to play. It is crucial to protect your loved ones and your family in the event of ‘what if’s’ and you never know when your time will come so preparing via finding a good term life insurance policy is a must. An affordable term life insurance policy is a legal contract between you and a life insurance provider. Basically you pay regular premiums (monthly or annually) and the insurer remits a sum of money to you after a definite period known as maturity or to your loved ones in the event of your demise. It not only acts as a financial safety net for your family and loved ones but life insurance can also have other benefits as well. Your insurance policy can act as a savings instrument of sorts, provide financial freedom and stability to you in your old age and can even help in reducing your tax liability. As you can see… the reasons to invest in a good term life insurance plan are bountiful however, purchasing one of the best plans for yourself can be tricky unless you know where to look. Below are tips on how to find the best and most affordable term life insurance plan to cover your and your families needs……
Know What You Want Covered
There are several different types of life insurance available to you, so make sure you do your research and purchase the best insurance plan for you and yours. Level term life insurance plans are the most straightforward as they pay out on death and always pays the same amount, if you pass away within the agreed term. If you are looking to safeguard your family’s financial security as your primary goal, you can buy an affordable term insurance plan that offers you high coverage at affordable rates.
Know How Much You Want Covered
This is where you want to decide on the amount of coverage needed to suit your coverage needs. A good overall rule of thumb is to cover 10 times your annual income at the very least, especially until your kids have finished their education, and some say up to 15 times your salary. It really all comes down to the amount and type of coverage you are looking for and to start you may just want to go with what you find to be affordable to you. Think about the debts you have incurred and what you need to pay off and simply make sure your policy covers this and maybe a little more if you can afford it. Here are more tips to think about when figuring out how much coverage you may need with your term life policy.
*Think of your families annual expenses multiplied by the number of years for which income replacement might be necessary.
*Think of the total amount of your outstanding debts and the cost of repaying mortgages, if any when deciding on your term life insurance policy amount.
*The amount you need to set aside for future expenses like your child’s education, wedding, etc.
Keep in mind that you need to make this policy affordable for yourself so get what you need in terms of coverage. Any coverage is better than no coverage at all and making sure you can easily afford the policy is a must so that you can keep it in good standing.
Find The Best Deal For You In Terms Of Premium & Policy Offerings
Here is where you can utilize those online premium calculators to figure out how much premium you have to pay in order to get the coverage you want. Make sure to compare different plans to find the perfect policy for you that offers and provides the highest coverage at rates that you can afford. Remember… there is nothing wrong with going with a basic term life policy to start, as this is not car insurance or health insurance and you are basically paying for a plan to pay out some cash in the event of death which is not hard to prove. You simply need a straightforward policy that will pay out in the event of your passing and think about it… there is little to argue about when someone has passed away or not, so you can always go with a cheaper more affordable plan and have that coverage that your family will need in the event they need it.
Select The Right Term Policy For You
Make sure that the term policy that you purchase should ideally be the number of years that your family will be financially dependent on you. The general rule of thumb for this calculation is to subtract your current age from the age at which you expect your income to stop or wish to accomplish in a particular life goal.
Find A Good & Reputable Policy Provider
Finding a company that you trust and that is reputable is a must. Look for affordable life insurance companies with a Claim Settlement Ratio (CSR) of over 95% for consecutive years as they are generally considered reliable which for me is super important. You may be wondering what is a CSR and it is the percentage of claims an insurance company has paid or settled in a financial fiscal year as compared to the number of claims placed. You can also and I highly recommend this step, read reviews from customers on the various life insurance companies websites and online to really know that the life insurer’s claim service if fast and hassle-free.
Disclose Absolutely Everything
You can find term policies that require no medical exam but if you do have to give them information it is best to be 100% upfront and disclose everything when setting up our policy so there are no issues down the road. If you consume tobacco or alcohol, or maybe even work in a dangerous or hazardous line of work, disclose this information to your life insurer. You must also declare any existing illnesses or family medical history of critical ailments. These factors influence your risk profile and for some policies may up your pricing BUT it is a must do to prevent claim rejections down the road due to not disclosing the information at the beginning. Be honest here and disclose it all as you don’t want to pay for a policy for years on end only to find that it is rejected when you need it due to not disclosing that information to start.
Educate Yourself On The Final Policy
Make sure you understand the ins and outs of your policy before it is finalized. Make sure to understand all of the terms and conditions clearly before making that final commitment and find out any relevant details such as the lock-in period, if there is one and also the circumstances in which the claim will be invalid.
Purchase Your Policy At A Young Age
Start early. Life insurance premiums are much lower and more affordable the younger you are so you can truly save on the cost of your premium is you purchase your life insurance policy as soon as you start earning money. You can begin with a lower level coverage too and add more to it as you grow older, build your family and when your income increases.
Select A Fixed Price Deal With Guaranteed Premiums
There are many types of term life insurance policies out there to choose from and you will often have a choice of guaranteed or reviewable premiums. A reviewable premium deal may be cheaper to purchase but will periodically be reviewed by your insurer and can be hiked on later down the road. A guaranteed premium means you will pay the same amount each and every month, no matter what, which I love as you will know exactly what you are paying over the life of the policy and the price never goes up.
Write The Policy In Trust & Save On Taxes
Writing a policy in trust is pretty easy to do and most good insurance companies will help to do this when you purchase the policy but it is good to know if it is or is not and if it’s the later……. get that done ASAP. If you don’t write it in trust, it automatically becomes part of your estate and can be drastically reduced by a huge hit in inheritance tax. Writing the policy in trust means it pays out directly to your dependents rather than being processed with the remainder of your estate which ultimately means they get the money faster and without inheritance tax being taken out.
Conclusion
Life insurance for parents is a must and it can help you to rest easy knowing that in the event that something happens to you or you spouse…. your family will be cared for. I have not discussed all types of insurance available on the market as there are some types of life insurance policies not discussed here that are exceptions to the rule. Make sure to do your research and prepare as life insurance should not be viewed as expensive but as a small necessary cost to move financial risk from you and your family, to someone else, an insurance carrier. The benefits are huge and the peace of mind is priceless in the event of an untimely tragedy as you can rest assured your family is protected and cared for. Inflation and life insurance, which are also important factors to consider when planning for your family’s future.
This is a collaboration between Deliciously Savvy & Responsival and all opinions are 100% my own. Thank you for stopping by and making sure to enter a giveaway before you leave!
