5 Tips on How to Save Money on Life Insuranc

A life insurance policy is a lifetime commitment. Therefore, saving on your policy premium at the beginning of the contract can end up saving you much more by the close of the policy term. It is therefore important that you seek out ways on how to save money on life insurance so as to pay the least possible premiums while not compromising on the coverage. Below are 5 tips that will assist you to get the best value for money when it comes to a life policy;

1. Have a Financial Plan

Before you seek ways on how to save money on insurance, it is important that you first come up with a long term, mid term and immediate financial plan. The plan does not need to be as detailed as that of a big corporation. However, it is imperative to have a general direction on how you want to handle your finances, investments and major purchases. Such a plan will help you know what type of insurance to purchase and when to buy one, when to buy a house, where to invest your money and such like decisions. There are various financial goals planning tools available on the internet and you can search for one that fits your needs. From this financial plan, you can better choose the type of insurance policy to go for and from here, you can seek ways on how to save money on a life policy.

2. Permanent Life Insurance Policy

One life insurance policy that you may consider is permanent life. Permanent life insurance consists of policies such as whole life and universal life policies. Permanent life policies give you a lifetime cover and therefore, your beneficiaries are guaranteed of the sum assured irrespective of when you die. Universal life is similar to whole life in that it is permanent but it comes with the advantages of flexible premiums and interest on invested cash value. One of the tips on how to save on insurance with these policies is to take a loan against the cash value as soon as you are eligible. You can then invest the loan in alternative investments. This type of loan does not affect your credit rating in any way and for universal life, you are not even required to repay the loan.

3. Separate Insurance and Investment

Another tip for saving on life policies is separating investment with insurance. In this case, you will take a term life insurance policy and then invest your other funds in various investment vehicles. Term life insurance policy is very cheap when compared to the other policy options. You can then choose to invest the funds in various ways such as increasing your mortgage repayments, investing in bonds and stocks or other investment options. This is a preferred way on how to save money on life insurance recommended by most personal financial planners.

4. Start Early

Another priceless tip on how to save money on life insurance is starting your cover early. The younger you are, the less you get to pay for your life policy irrespective of the type. Therefore, you can save lots of money by starting your coverage early. Besides this, starting early also helps you not to get locked out from insurance if an non-insurable condition crops up later in life.

5. Negotiate Premium and Compare Rates

Majority of those who purchase life insurance policies do not negotiate on the premiums. However, most life insurance providers provide room for discounts and negotiations. One other way on how to save money on insurance is to seek quotes from different insurance companies and compare the rates.

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