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Get Affordable Life Insurance Rates
20 Feb 2018

How to Get Affordable Life Insurance Rates

Over the last few years, the majority of Americans have started to realize that they need life insurance. However, the most recent data shows that 30 percent of households still are not insured.

Of those households that do not have life insurance, 8 out of 10 said that they didn’t have it because they couldn’t afford it.

If you’re part of this group, keep reading. We’re sharing some of the easiest ways for you to get affordable life insurance rates today.

Most Affordable Life Insurance Options

The first step to finding affordable life insurance is knowing which types of policies typically come with the lowest rates. Two of the most affordable options are term life insurance and final expense insurance.

Term Life Insurance

Term life insurance works by providing coverage for a specific period of time.

If you pass away during the policy’s term, your beneficiary can file a claim and receive the death benefit from the policy.

Since the coverage you receive with a term life insurance policy isn’t permanent, this is typically the most affordable option.

You also cannot borrow against a term life insurance policy like you can with other varieties.

To give you an idea of how much this type of policy costs, let’s use the example of a healthy, 30-year-old male. For a 20-year term policy with a $500,000 value, the average cost would be about $400 per year.

When you’re shopping for term life insurance, pay attention to the policy’s term length and death benefit.

Term lengths vary from one year to 35 years. You can also customize the death benefit to be anywhere from $50,000 to $1 million.

Final Expense Insurance

Final expense insurance is another option if you’re looking for affordable life insurance.

This kind of policy is usually permanent, but it has a smaller value ($5,000-$25,000 on average). This is because it’s meant to cover limited, death-related expenses.

Final expense insurance is usually marketed to seniors. However, younger individuals can also benefit from it.

This type of insurance is different from funeral insurance be beneficiaries can use the death benefit however they’d like. Funeral insurance, on the other hand, pays the death benefit directly to a funeral service provider.

The average cost of a final expense policy for a 55-year-old woman is just over $500 per year.

When you’re shopping for final expense insurance, be sure to pay careful attention to what’s offered by each insurer.

There is often a lot of variety in policies depending on the company you work with. This means you’ll need to make sure you buy a policy that truly aligns with your expectations.

Factors That Influence Your Rates

As with any type of insurance, there are a number of factors that influence the cost of your life insurance, including:

  • Age
  • Gender
  • Medical history and general health
  • Tobacco use
  • Family medical history
  • Occupation
  • Hobbies
  • Driving history
  • Credit history

As you can see, there’s a lot that goes into calculating the cost of your insurance. Some of these factors are outside of your control, like your age and gender. But, there are also a lot of things you can control to help tweak your insurance premiums.

Change Your Habits

If you want to decrease costs, you may want to consider changing some of the habits that could be holding you back from a more affordable life insurance policy.

Insurers consider smokers to be a higher risk. They also, in most cases, will consider you a smoker if you’ve smoked in the past year.

But, if you haven’t smoked for five years or more, they may overlook your history of tobacco use.

Have you gone three or four years without smoking? You may want to consider holding out on insurance for a year or two to lower your premium and save more over the length of your policy.

Fixing your credit can also help reduce your risk. It’ll take some time, of course, but it’ll be worth it to wait a few months if it decreases your total costs.

Additional Tips

There are lots of other things you can do to get more affordable life insurance rates. Keep these additional tips in mind as you begin your search.

Get Multiple Quotes

Don’t just go with the first insurer you talk to. Spend some time getting multiple quotes and looking at all your options.

You can even use an online tool to compare quotes from different insurers.

Start Shopping Early

The sooner you start shopping for life insurance, the better.

Your policy will almost always be cheaper when you’re younger since younger people are typically healthier.

You also never know when your health will change. Take advantage of your health now so that you’re covered in case things take a turn later on.

Bundle Coverages if Possible

Another way to save money is to bundle your life insurance coverage with your car or homeowners insurance. Many insurers will give you a discount if you go this route.

Some companies will also give you a deal if you switch to them from another insurer for all of your coverage.

Research Your Insurer’s Financial Stability

Before you go with a certain insurer, do some research to make sure they’re financially stable. It doesn’t matter if they offer you a really cheap policy if they end up in a position later on where they can’t pay out what you’re owed.

Insurance rating agencies like A.M. Best will give you up-to-date information on almost every insurance company out there.

After you’ve gotten a few different quotes, head to their site to learn more about the company’s reputation and find out if they’re a good one to go with.

Want to Save More Money?

You now know how you can go about getting the most affordable life insurance rates possible.

Do you need to save money in other areas of your life, perhaps on your car insurance? If so, check out this post for some great tips on decreasing your car insurance premiums.

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