Pay less for life insurance.
You will probably own life insurance for most of your life. Add up all the premiums you will pay and it becomes a major expense so any cost reductions are meaningful.
Stacy Johnson at money.msn.com/ offers eight ideas to cut your life insurance costs. Some of the advice is obvious yet helpful. For example, don’t buy more than you need.
Don’t buy more than you need.
As someone who sold life insurance back in my stockbroker days, I can assure you that fear is often an integral part of the sales process. In addition, the insurance salesman makes assumptions that may not accurately reflect your financial need.
For example, many salespeople will simply say to multiply your annual salary by seven. Many calculators don’t take Social Security survivor benefits into account. They might also assume you want a benefit big enough so your spouse and children can live forever off the interest alone. Or that your kids plan on attending Harvard. Or that your mortgage balance isn’t decreasing with every payment you make.
How much insurance you need isn’t an exact science. Maybe you want to leave your survivors wealthy, or maybe you just want to leave enough to pay for your funeral. But if you leave it up to a company-sponsored calculator or salesperson, expect a big death benefit — and a big premium to go with it.
Better idea? Figure out what your death would mean financially to your family and determine their needs, both short term (paying for your funeral) and long term (paying off the mortgage and college costs). When you’ve arrived at an estimate, subtract the money you have now or can expect from Social Security or work-related policies, then cover the shortfall with insurance.
Stay or get healthy. Insurance rates are partially determined by your health status. Many insurance companies have several rate categories; from preferred plus to preferred down to standard or even rated up.
Health issues will make your insurance more expensive, so getting healthier can mean savings. If you quit smoking, lose weight or make other life changes that lower the risk for the insurance company, don’t be afraid to contact them and ask for a reconsideration. But be prepared to provide proof, such as an extensive medical history, to get a lower rate.
Ms. Johnson’s advice includes six more tips. You can read the entire article at http://money.msn.com/saving-money-tips/post.aspx?post=5d5c144e-50e1-4e78-be32-cbfe2ca847b9.