Know the different types of life insurance.

Life insurance comes in many different types and the type of insurance is reflected in the cost of the premiums.

-Whole life is the most expensive form of life insurance. This is because the policy will build up a cash value on the premiums paid. Premiums will end after a set period, usually 20 years or so. At that time,

-Term life is the least expensive policy. The “term” is the time the policy will be in effect. If you purchase a 10 year term policy and pay the premiums, you will have life insurance for 10 years, at which time the policy will cease.

-Universal life has policy features of whole life and term policies. Less expensive than whole life, universal also provides a life long policy, but the premiums may fluctuate, depending on market conditions. A universal life will allow you to use some of the cash value to pay for premiums if you experience hard times.

Buy young.

The nature of life insurance is the younger you purchase it, the less your rates will be. On average, an individual purchasing a term policy at 35 will pay half of the premium of an individual at the age of 50. Purchasing a long term policy at a younger age can lock you into a lower rate for many years. This applies to whole life, term, universal life and variable life policies.

Take care of your body.

Quitting smoking can be one of the best ways to save money on life insurance premiums. Most companies have different rates for smokers and non-smokers. Getting yourself in better physical shape will make you less of a risk to an insurance company. This is especially true when the company requires a medical exam prior to issuing the policy. You will feel better and save yourself a great deal of money.

Shop around.

As with cars, mortgage rates, and household items, the internet has made shopping for life insurance easier than ever. Whether going to an insurance broker’s website or a company website, most can provide a free quote within minutes.

With a little homework behind the keyboard, you can obtain dozens of quotes from many insurance companies. There is no longer a need to obtain a single quote from a single life insurance agent. You can check the financial stability of the company by contacting your state’s insurance commissioner, or look for life insurance credit ratings from companies like Moody’s or A.M. Best. Companies with ratings A or higher are considered financially stable.

Know your needs

An older individual without a mortgage or dependent children will usually not have the same insurance needs as a new home owner with minor children. Do a little research before purchasing a policy to determine your needs. To make life more simple, many insurance companies have insurance calculators on their website.

Categorised as: Saving money on life insurance