Cutting the Cost of Your Life Insurance

Smart Ways in Cutting the Cost of Your Life Insurance

One of the most important financial decisions you will ever make is choosing which company to buy your life insurance from. This decision can have a huge impact on how much you pay for your coverage, & it’s not something that should be taken lightly. In this guide, we’re going to discuss some strategies that will help cut down on the cost of your life insurance policy so you don’t break the bank every month!
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Where to Start

First, you’ll need to figure out how much coverage you need. Several different factors go into this decision, and it’s best to consult with your financial advisor or insurance agent about what amount is right for you in particular.

The first thing they will do is ask some basic questions about your health history- if there were any major problems when you had your physical? What kind of hobbies does the person have? How often are they on their feet (for example, an active desk job vs. a passive one)? Do they have any pre-existing conditions like diabetes or cancer?

These types of things can make a big difference in the cost at both the initial purchase and monthly payments over time.

Once you have a quote for the cost of life insurance1, three other things will help reduce your monthly payments.

One strategy is to increase how much of your premium payments goes into the actual death benefit- this means less money has to be paid out for them to pay off their debt if they die.


Another option is increasing the period on which premiums are calculated (for example, instead of paying 100 pounds/month for life insurance over 20 years old and under 50 years old, you could change it, so it’s 50 pounds per month until age 70.

One final note- if you’re looking for a company that offers life insurance with no health exam, it’s important to know that this is not the same as permanent coverage.

With these policies, when the insurance company reviews your application and finds out about any pre-existing conditions2 or other major medical problems, they will often decline their offer of coverage without refunding any premiums paid in advance.

When to Apply

It’s important to know the date on which you would like coverage for. Some companies offer it as an option, while others don’t allow you to change your policy when the time comes.

Many people think that they should apply right before their birthday or retirement because then it will be more expensive due to mortality rates- but this isn’t always true!


If someone is starting and has a long life expectancy ahead of them, adding insurance at 18 might save money over never applying until age 45.

The best strategy here is finding what works for you based on your needs and lifestyle habits!

Choosing Enough Cover

It’s important to remember that the amount of coverage you purchase should be enough for your needs- not too much and not too little.

If it is, this will lead to wasted premiums paid out over time. If it isn’t, then there might come a day where you need more money than what was set aside in advance.

This can put a person into financial hardship when they don’t have anything saved up!

When choosing how much life insurance someone should buy, experts recommend following these steps:

Let me show you,

First, figure out how much income would be lost if the individual died right now (think about mortgage payments or college tuition). Then subtract any expenses covered by other sources such as social security benefits or spouse’s income from that number.

Next, calculate how much money would be needed per year to provide for the same quality of life (like clothes or food). Then multiply that by 15-25 years.

You see:

This will give you a ballpark figure for what amount might work best!

The more complicated your financial situation becomes as time goes on.

New dependents are born into the picture. The longer this process may take, the more difficult it can be to find a reasonable middle ground between too little coverage and too many premiums paid out over time.

It’s always better to start with a smaller policy than ending up needing more later down the line when there is less flexibility in terms of affordability or changing policies altogether.

Can You Get a Joint Policy? 

If someone wants to take out a joint policy with their spouse, it might be possible!

This will make the monthly payment lower because there are two people making payments.

It’s also important to know that when both spouses die simultaneously- which is called double indemnity death benefit coverage- this can greatly increase your premiums and then payout amount in case of tragedy.

Here’s an interesting fact:

Statistics show that couples who get these policies together end up saving an average of 25% on their premiums over time than if they were living separately without life insurance at all! All three strategies discussed above should work well for most couples looking into getting married soon.

Can You Choose an Income Payout Instead?

This can be an option for those who want their life insurance to go towards a beneficiary instead of being used as repayment for the premiums!

It might not seem like it at first glance- but this is just as effective because what you’re doing then is taking out a tax-free loan from your future earnings.

It gets better,

Since there are no taxes owed on additional income when paid out in the form of a life insurance policy, if someone has children later down the line or decides they need less coverage than expected after retiring and drawing funds from other sources, it will work well with savings accounts that pay interest rates higher than 0%.

It’s important to research different options before making any final decisions, so gather all necessary information beforehand!

Choosing a Policy Term

The length of time you choose for your policy is also important.

A shorter term will cost less but have a higher monthly premium and payout amount if something tragic happens.

A longer-term, on the other hand, might be cheaper because it has lower monthly premiums. Still, payouts would need to be larger if anything happens, putting a person into financial hardship more easily than before!

Deciding what makes sense for each individual’s needs should dictate their final decision here- as they’ll most likely end up paying this every month no matter how long or short they decide to go with the coverage duration!

Finding the Best Price

It can also be helpful to find the best price for any given policy.

This is because some people might go with one company simply because it’s cheaper than others- but that doesn’t mean they’ll have more benefits or better coverage!

Look at what each company offers in terms of benefits and discounts on premiums, then compare them side by side before deciding which will be most beneficial over time.

Let me explain,

For example, if someone wants their life insurance payout amount related towards college tuition payments, so they don’t need loans later down the line, this means there should only be about four years’ worth of payouts needed when deciding how much coverage to purchase initially.

The less money paid out early along these lines could save money later on in the long run!

That’s why it’s important to look at all of these factors before deciding what will be best for any given individual.

Common Questions

What If I Need to Change the Beneficiary on My Policy?

How Much Does Life Insurance Policy Cost?

Can You Cancel Your Policy?

What If I Need to Change My Policy?

In conclusion

That was only the beginning,

There’s more to it than meets the eye when looking into how to cut the cost of your life insurance.

It’s important to weigh out the options and find what works best for each individual before making final decisions. With these three strategies, it will be easier than ever to make those monthly payments while saving money in other ways!


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