Here are a few things to do and think about when buying life insurance that can help you save money.
- Be healthy: If you're in good health, you will pay much less for life insurance. In particular, you should try to do three things:
- Don't smoke: Smokers pay much higher rates on life insurance than non-smokers because they tend to die much younger. Learn more about smoking and life insurance.
- Stay in good shape: If you're overweight, many insurance companies will charge you higher rates because people who are overweight are more likely to have heart attacks and other health problems.
- Eat right: Exercise is one important way to stay in shape. But eating healthy is just as important.
If you bought life insurance when you weren't as healthy as you are now, ask your insurance agent if you can now qualify for a better rate.
- Buy term insurance: Term insurance covers you for a specific period of time (usually 10-30 years) and only pays a death benefit. It's much less expensive than permanent insurance for the same amount of coverage. So if you need the most insurance you can get for a certain amount of money, term is the way to go.
- Consider whether you will want insurance when you are older: Term insurance gets much more expensive to buy as you get older. So if you think you will want insurance until you retire (or beyond), you probably want to buy permanent insurance. Or you should buy term insurance with the longest possible term (usually 30 years).
On the other hand, if you only think you will need term insurance for a limited time (for example until your kids finish school), then you probably want to choose term insurance for exactly that amount of time.
- Shop around: Insurance is like many others things you buy. Shopping around can sometimes help you find a better price. Find out what to look for in a life insurance company.
- Group insurance: Many companies offer a group insurance program for their employees. These plans usually cost less than insurance you buy on your own.
But there are usually limits on how much insurance you can buy, and you usually have to give up the insurance if you stop working at the company. So while life insurance from your company can be one piece of your life insurance plans, it probably doesn't make sense to buy all your life insurance this way.
Will improving my health really make much difference in my life insurance bills?
If I improve my health, will I still be stuck with the same high rates I have to pay now?
I smoke, but I'm going to tell the insurance company I don't. What's the worst they can do?