Finding Affordable Life Insurance

What factors affect the cost of life insurance? What does it mean to have cheap life insurance?

People do not realize the many factors that go into determining the cost of your life insurance. That is why it is very important to work with an independent insurance agent to streamline this sometimes lengthy process. This agent needs to have underwriting knowledge and access to a variety of carriers to be able to guide you to fit the needs of your budget, financial, and family needs upon your death.

Here is a list of the main factors that determine the cost of life insurance:

– Your age
– Sex
– Tobacco use
– Current health condition
– Medical history
– Family’s medical history as certain illnesses are hereditary
– Amount of coverage
– Type of coverage – a Term Policy will be less expensive than a Permanent Policy such as Whole Life or Universal Life
– Duration of coverage – for example, a 10-year term policy will be significantly less expensive than a 30-year term
– High-risk activities that you participate in such as sky diving, scuba diving, auto racing, pilot, etc.

In my mind “cheap” is a policy you can afford and feel good about knowing that your family and/or future financial needs are being met. It’s important to keep in mind that “cheap” insurance is relative to your health profile. For example, $300/month for $1,000,000 Life Insurance may be expensive for a healthy 30-year-old; however, this would be considered “cheap” for a 30-year-old with cardiovascular medical history. Purchasing life insurance when you are young (i.e. early in your career, when you are healthy and/or single), even if you have no family responsibilities (i.e. spouse, children) can offer you the “cheapest” cost.

What is the best strategy to find cheaper rates on a life insurance policy?

The best strategy to find those “cheaper” rates is to work with an independent agent that has access to the most competitive insurance markets. The internet offers you the arena to do your research; however, working with an experienced agency will get you the most competitive, innovative products and pricing. Of course, taking care of your health by going for annual physicals, exercising, limiting your drinking and tobacco use is also an important strategy. Keep in mind it is also important to revisit any life or financial changes with your agent every 3-5 years to assess if your current policy is still offering you and your family the protection they need.

What types of life insurance policies are the cheapest? Why?

Term Life Insurance is the “cheapest” in the short term; however, depending on how long you need life insurance, a Permanent Life Policy may be more economical. For example, paying for Term Life Insurance in your 60s and 70s will be quite expensive, so if you anticipate needing insurance in the later years, purchasing Permanent Life Insurance when you are young may be more economical in the long term. Again, consider working with an independent insurance agent to help you determine the answer to this question.

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