How to Save on Life Insurance Premium Costs
What to do to Get a More Affordable Life Insurance Policy
Nov 3, 2009
Nobody wants to pay more for their life insurance than is strictly necessary. Consumers may be wise to look at ways to save before they start shopping around for premium costs. This could help them get more affordable coverage.
Why do Life Insurance Premium Costs Vary?
Although life insurance policies may share the same purpose they can have very variable costs. This may, of course, depend on the insurer themselves but the individual taking out a policy, the type of coverage they choose and how they pick it can all play a part in the ultimate price that is paid. How can consumers cut costs here?
Ways to Save on Life Insurance
There are various ways that the individual can save money on life coverage. These include:
- Buy early: Premium costs tend to rise with age. Taking out a policy at a young age could be considerably cheaper than later in life.
- Lifestyle changes: Some issues such as smoking and being overweight can increase costs a lot. Quitting smoking and losing weight could, quite simply, see charges reduced.
- Insurance type: Not all life coverage works the same and this can influence premiums. Term insurance, for example, may well be a lot cheaper than a whole life policy. Looking at the pros and cons of these insurance types could help.
- Coverage amount: The higher the insured sum, the higher the premium. Taking time to work out how much insurance is actually needed could make things more cost-effective.
- Insurer discounts: Sometimes buying multiple policies from the same insurance company can come with discounts. So, for example, talking to one company about life, car and home insurance may be a way of saving money if they will give a package deal.
- Online comparisons: There are a lot of companies and policies to choose from in this sector. A quick look at an online quote comparison site could help bring up the cheapest policies at any given time.
Using any (or all) of these solutions may see the individual save some money on their premium costs.
Don't Fall Into the False Economy Trap
Although saving money on life insurance is important this shouldn't be done if the savings made will potentially prove to be a false economy down the line. Underinsuring to get a cheaper premium, for example, may save money in policy payments but could leave a family without the money they need to get by if the insurance holder dies.
Consumers should also take care not to simply pick the cheapest life policy they can find without checking its terms and conditions. If these affect coverage then this could, again, negate any savings made if a claim then needs to be made.
Source: The Financial Services Authority
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