Low Cost Life Insurance-Tips on How to Budget Your Life Insurance at Low Cost

March 9, 2009 by  
Filed under Featured, Life Insurance

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Like everyone else, of course, we would all like to have low cost life insurance. Though this might be difficult given with lots of choices to choose from, here are some helpful tips that might help you see you through the budget:

a) The purpose of life insurance is to be guaranteed the amount sufficient enough to be able to substitute your current income in case you die before you are able to save up enough financially for your dependents. If you have a family, children or someone depending on you, being the bread winner, then life insurance assures that you can still provide for them even at that time of your death.
If you are middle aged and you have dependants at home, for college tuition, or a mortgage and bills to cover… if so you were to die at an unexpected time, then instead of your family being financially panicked, you can at least be able to provide them with financial aid with your life insurance. Term life insurance is less expensive than a whole life insurance for middle aged individuals. However, if you are single with no dependents, then you probably don’t need life insurance.

b) Life insurance should be a separate matter from investments. When shopping for life insurance, one way to evaluate term life insurance is to determine the cost per $1000 of coverage. To do that, divide the annual premium as offered by the amount of coverage that you need. Let’s say, you need $700,000 for coverage, and the annual life insurance rate premium offers you $3700, so you can calculate it like this per $1000 coverage: ($3700 ÷ $700,000) = $5.28. With this, you can now compare life insurance rates among life insurance companies. Protect your family first before you save up for sufficient assets.

c) Why should you choose term life insurance? There are two types of life insurance you can choose from – the term life insurance and the whole life insurance. To explain, Term life insurance insures you for a certain number of years (example 10, 20 or 30), and pays a death benefit. Whole life insurance may provide you with interests and dividends. Therefore, we can say that term life insurance is less expensive since there are no dividends or interest involved. One tip would be for the bread winner to buy the right amount of term life insurance he needs in order to protect his family during his critical period while allowing to invest on the savings he had to be financially secure later.

d) Another way of getting a low cost life insurance is to keep your physical condition at a point where it is eligible for a less expensive life insurance policy. For example, years ago you have high blood pressure, and you applied for life insurance, and because of that, the life insurance company charges you with a higher life insurance rate due to your physical condition. But after a few years, you took care of your health, and thus your blood pressure decreased. You could opt for a change in your life insurance policy with a lower life insurance rate.

e) To aid you with finding a low cost life insurance, you can ask help from a financial advisor or do the homework yourself by browsing through the Internet. There are over 1000 life insurance companies and their life insurance rates and life insurance quotes vary by hundreds of dollars given the same amount of coverage and benefits. Compare and read through all their terms.

With these tips in mind, you will be able to enjoy a low cost life insurance within your budget needs while protecting your family before something unexpected happens that might endanger the financial stability of your family.