How to Save Money On Term Insurance
Why it is important: Most everyone needs life insurance. What type do you buy? Where do you get the best deal? Are you currently paying too much for life insurance?
Most everyone needs life insurance. What type do you buy?
I am a big advocate of buying term insurance. Term insurance is for those who want to insure a specific time period of their life. The whole concept of term life is to pay as little as possible for insurance while insuring the time period where you can't self insure. What is self insurance? It is when you have enough financial resources built up to take care of your family in the event of a death. Until you meet that threshold you definitely need insurance.
Now most life insurance agents/financial advisers are going to pitch permanent life insurance such as whole life or investment based life insurance such as fixed indexed life insurance or variable life insurance. There are two main reasons why I recommend term over those types. First, I advocate you get as much insurance as you can. With term, that is possible. With the more expensive options, that might not be possible unless you are willing to invest quite a bit of money. Second, I like to keep my investments and my insurance separate. Life insurance marketing makes these investment based policies look much better than they really are. They are typically illustrated where a perfect environment exists. We are far from living in a perfect environment.
So who do you buy a term policy from? It depends on these two criteria.
You Have Great Health
If you have great health or good health, then you can shop all of the major carriers and get the best combination of strength of company and price. The lowest price isn't always the wisest move. Always remember that term life insurance is a competitive market. Always go to someone who can shop and compare prices. Companies will market prices of term insurance given specific ages and situations. The rates sound low. Don't fall for it! You still should shop it with someone that can compare prices from several companies.
You Have Not So Good Health
This is where a knowledgeable financial adviser comes in handy. It is important to determine your health concerns and select the best company for your particular situation. For example, some insurance companies are more competitive for high blood pressure than others or some companies price insurance for high cholesterol better than others. Even something as extreme as Prostate Cancer there are a few carriers that would consider insuring this situation. The bottom line is to get an adviser that will evaluate your health concerns and talk to the insurance companies first before giving a recommendation.
What if you already have a term policy?
In that case, shop it against the available options. You might be surprised that you can save some money. This also applies if you are relying on company sponsored life insurance. In many instances, you can save money by securing life insurance outside of the company.
First and foremost, it is extremely important to have a well thought out life insurance plan in place. Just make sure you are getting a good value.