Research shows that 52% of Americans don’t get life insurance because they believe that it’s too expensive.
However, there are many simple ways to find a cheaper life insurance policy — from using price comparison tools to giving up a dangerous hobby.
Life insurance guarantees that your family will be provided for if you pass away, and it’s crucial if you have young children or other dependents.
Before you dismiss life insurance as too costly, try following the advice below.
1. Use Price Comparison Tools
If you haven’t already used price comparison tools to find cheaper life insurance, you could be missing out.
These sites ask you to fill in your details once, then generate quotes from hundreds of different providers. They make it easy to compare features like price and level of cover without spending hours filling in various forms.
There are some providers who aren’t included on price comparison sites, so it can be worth getting quotes from them separately.
2. Choose the Right Type of Policy
Choosing the wrong policy can send costs skyrocketing, so it’s essential to know of all your options.
A policy that offers permanent coverage will pay out no matter when you die, even if it’s many years. While this offers increased security, it means the policy is much more expensive.
Term life insurance only pays out if you die within a specified number of years. This might be appropriate if you only need life insurance while your children are young, or for as long as is left on your mortgage.
Term life insurance is cheaper than permanent life insurance.
You can also choose decreasing-term insurance, where the amount paid out decreases as time passes. Again, this can make sense if you’re paying off a mortgage or raising children.
3. Set the Right Length of Policy
If you choose term life insurance, you must decide how long you want the policy in force.
If your children are close to adulthood or you don’t have long left on your mortgage, you could choose a 10-year policy. This will be significantly cheaper than a 30 or 40-year plan.
However, it’s important to think carefully about what life might look like before you knock years off your policy.
If you’re in two minds about what to do, it’s worth considering a policy that can be renewed after the initial term is over.
4. Avoid Over-Insuring Yourself
It’s easy to get carried away when purchasing life insurance, and sometimes people end up overpaying by over-insuring themselves.
Sit down with a calculator and work out how much your family will need if you pass away. Remember that you’re trying to maintain their current standard of living, not give them so much that it feels like a lottery win.
Having a clear idea of potential costs prevents you from taking out more insurance than you need, lowering your premiums.
5. Make Healthier Lifestyle Choices
The more likely you are to die young, the more expensive your life insurance policy will be.
While it can be a hard fact to face, making healthier lifestyle choices is a smart way to lower your premiums and improve your health.
Insurance companies look at factors like cholesterol, blood pressure, and weight to determine your mortality risk. If you can get these issues under control before your medical exam, you’ll benefit from lower costs.
Simple changes to your diet and exercise routine could make a massive difference in your insurance costs.
6. Arrange Life Insurance While You’re Young
The younger you are, the cheaper your life insurance will be, since you have a lower mortality risk.
Many people don’t take out their first policy until they have financial responsibilities like a mortgage or a family. However, it’s worth looking at quotes while you’re young and taking out a contract if you can afford to.
You’ll benefit from much lower costs, and you’ll be protected if you do start a family or purchase a home.
You’ll also avoid the higher costs that come with long-term health conditions, which you could develop as you get older.
7. Avoid High-Risk Hobbies and Sports
Life insurance providers will charge more if you take part in high-risk hobbies.
High-risk hobbies include skydiving, mountain climbing, motorcycle riding, hang gliding, and scuba diving. These activities have some of the highest mortality rates out there, making you riskier to insure.
By simply swapping some of your high-risk hobbies for safer activities, you’ll drastically cut the price of your insurance policy.
8. Try to Quit Smoking
Smoking increases your mortality risk and therefore increases the cost of life insurance.
Making an effort to quit smoking will make your policy much cheaper. You should not use tobacco for at least a year before you apply for a policy.
Don’t be tempted to lie to insurers, as your policy won’t pay out if the provider finds out that you were dishonest.
9. Consider Taking out a Joint Policy
If you’re part of a couple, consider taking out a joint policy.
It’s usually cheaper than two separate policies and pays out on a ‘first death’ basis. That means you’ll get a payment when the first policy member dies, and then the policy will end. This type of contract is mostly used in estate planning to cover taxes.
Before taking out a joint policy, think carefully about the future. If the relationship breaks down, you may not divide your joint coverage into two single policies.
10. Avoid Unnecessary Extras
Many life insurance companies offer free extras, like a partial payment for terminal illnesses.
Other (not free) extras can be helpful in some circumstances, don’t add them all without adequately considering the cost. These include Waiver of Premium for disability or additional accidental death benefits.
If all you need is basic life insurance, you’ll save a lot by avoiding optional extras.
Could You Get a Cheaper Life Insurance Policy?
Getting a cheaper life insurance policy isn’t rocket science.
By making healthy lifestyle changes, choosing the right level of life insurance, and using price comparison tools, you’ll easily be able to save money.