Life insurance is one of those financial products most people avoid talking about. The topic feels too depressing and we immediately think about something cheerier like how our favorite baseball team is doing, or what pizza you are going to eat tonight. But it is important, however, to take out life insurance, and discuss what options are available with your spouse or partner. Here, we will look at ways you can save money on life insurance.
Use an Online Calculator
Don't let a salesperson talk you into taking out a policy which is unsuitable for your needs. You might end up with excess coverage or be under-covered. Use an online calculator to get a better idea of how much cover you need to support your loved ones in the event of your death.
Choose a Term-life Policy
A term-life policy is the easiest option for most Americans aged between 20 – 50. They offer coverage with fixed payments for the term of the policy.
Find Quotes Online
The easiest way to save money is to find quotes online. Websites such as Accuquote and InsWeb search through hundreds of insurers to find the best deal for your needs. You'll still have to fill out a detailed form and undertake a medical exam, though.
Be Healthy
Being in the best possible health can reduce policy costs. Stop smoking, get in shape and lower your cholesterol to save money. You'll not only feel better, but your wallet will thank you, too.
Choose Where to Buy
Choosing where to buy life insurance can save you money. You can buy direct from the insurer and save on agent's fees, or pay a fee to a financial planner who will help find and arrange it for you. Your choice.
Understand How Everyone Gets Paid
Remember that insurance agents and commission-only financial planners earn money through selling policies. Some might not necessarily recommend the right policy for you if it doesn't earn them much money. Fee-plus-commission financial planners charge for advice and recommending a product, while fee-only planners only charge for advice. It's up to you to apply. Choose wisely and get the best deal.
Research
There's no substitute for researching the best policy that's right for you. Look online and read financial magazines to get a good deal.
Buy From a Financially Healthy Company
Make sure your insurer is in good shape. Look for an "A" rating or higher from rating agencies such as Standard & Poor's, Moody's and Fitch Ratings. This will help ensure your investment is in good hands and you won't suffer any losses should the company be in trouble.
Be Alert
Avoid agents or salespeople who claim to be more knowledgeable about the insurer than a ratings agency or who try to bully you into a policy which isn't suitable. Complain to a senior manager and file a complaint with your state's insurance department or attorney general.
Make Changes when Needed
Your life insurance will change over time. You may get married, have kids, or even divorce. Adjust your policy to suit your circumstances and don't just forget about it. You may not even need a policy when you are retired and have enough saved up.
A guest post by Liz Goldman, personal finance expert and freelance writer for Sunbird Forex Broker – the CFD broker
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