Individuals who have been uninsured most of their lifetime are most often the toughest to persuade in getting life insurance. In the US alone, there are up to 97 million Americans who do not have life insurance in place. A large chunk of these people are simply not aware of the importance of insurance, while some feel that they have enough money saved to take care of after-death expenses for the family. If you are one of the millions uninsured, now may just be the perfect time to assess your needs and include life insurance as an important safety net for your loved ones in the time of your demise.
Here are some tips that will guide you to a smart and informed decision:
Play the Field
Avoid talking immediately to an insurance agent connected with a particular insurance company. Doing so will not allow you an opportunity to shop around and get the cheapest rates, especially if the agent is persuasive and you are easily convinced.
There are many price comparison websites that can give you free life insurance quotes from different reputable insurance companies. Consider doing a search on them as this will give you the most number of options in the least amount of time. By doing so, you get more time to evaluate and compare quotes and coverages, and will allow you to negotiate with your top choices for the best rates.
Time to Split Up
The savings on premium you get from combining your life insurance policy with your spouse is not significant enough for you to not consider taking up separate life insurance policies. A combined policy between you and your spouse will have a single payout regardless of whether one or both of you passes on, and the policy will end after the payout. On the other hand, by paying a bit more for separate policies, the coverage will carry on even after the demise of one of the spouses. Likewise, in the unfortunate event of both spouses pass away together, the beneficiaries will receive twice the amount from both individual policies’ payouts, assuming both insurance coverage are equal.
A Question of Trust
If your intended beneficiaries such as your children are minors, consider setting up a trust instead so that the trust becomes the beneficiary. The appointed trustee shall then be able to draw funds to support your children based on the instructions you have drawn up. Likewise, setting up your insurance policy “in trust” may be beneficial when calculating for inheritance tax. Take some time to speak with a financial adviser for more details on this.
Health is Wealth
One of the most common sense ways of reducing the cost of your life insurance premium is to stay healthy and avoid activities that put your life in risk. Smoking, excessive drinking, engaging in extreme sports, and working in hazardous environments are a few examples of activities that are considered high risk, and thus may drive up the cost of your insurance premiums. Worst of all, insurance companies may decline to cover you if they deem your lifestyle too reckless or dangerous.
Regular exercise, eating the right food, and quitting smoking for at least a year can help bring down your premiums significantly because it will help reduce the insurance company’s risk exposure when providing you with coverage.
Do not attempt to lie about your health condition, because medical exams will reveal the truth, and will invalidate your insurance coverage.