4 Hacks for Cutting the Costs of Life Insurance

If shopping frequently for life insurance was the norm, then we’d probably all become experts in all the tricks that would get the best value for money. But life insurance is one of those things that most of us only buy rarely – perhaps just once in our lives, or twice at a push. And because of that, most of us aren’t aware of the mistakes made along the way, or even if they were made at all.

If you’re in the market for life insurance and want to make sure that you’re getting the best deal, then you’re in the right place. Here are five hacks that are well-known to industry leaders that can help you make sure you’re getting the best coverage at the best price.

#1. See if buying more could end up costing less:

You can often get a discount when buying items like groceries in bulk, so why not see if you can do the same for your life insurance? Typically, insurers will have thresholds where the ‘cost per thousand dollars’ in coverage often drops – sometimes quite dramatically – meaning that your annual premium could actually end up being lower when you take out a bigger policy.

It’s also a smart idea to round up to the next $100,000 when getting quotes. If you’re not sure what you need to be looking for, get a good insurance broker – brokers make it easy to get the insurance policy that best fits your needs.

#2. Choose a policy that matches your long-term obligations:

If you are buying term life insurance, you will typically want to get a policy that will last long enough to cover your longest financial obligations. For example, if you’re wanting to cover a mortgage that currently is going to last for another 15 years, get a 20-year term life policy.

If your major financial obligations end at different times over the next few decades, it might be a wise idea for you to purchase multiple different policies of different lengths; each coinciding with the end of a large debt or other financial obligation; a strategy that is often referred to as laddering or staggering.

This allows you to make sure that you are not overinsuring yourself by purchasing one large policy to cover debts that will be long paid off before the policy ends.

#3. Consider working with an independent agent:

Taking a DIY approach to buying life insurance and shopping around online often turns out to be the best option for many customers, but if you aren’t in perfect health or there are other factors, such as a stressful or high-risk career that could make life insurance pricier for you than most, then it might not be the best option for you.

An independent agent will shop the market on your behalf to help you find insurers that are willing to provide cover to you at the best price taking all your circumstances into account.

#4. Add riders carefully:

Riders are a way of attaching extras to your insurance policy – but bear in mind that most of the time, the majority of them aren’t really worth the price, so only add them if you think that you might benefit from having them in the future.

Many insurers offer a chronic illness rider at no extra charge, so if the insurance company you’ve chosen offers this then it’s a wise idea to accept it. This allows you to access your death benefit early if you experience a chronic illness; you can draw down your benefit while you’re still alive and if you pass away, your beneficiaries will receive the remainder.

When it comes to getting life insurance, it’s easy to fall into traps and pitfalls – after all, it’s not something that most of us buy every day. Keep these tips in mind to make sure that you’re getting the best cover.