Whether you’re a newlywed, first-or-second-time parent or experiencing another major life event, life insurance is a crucial component of your financial plan.
But how do you ensure you don’t pay too much? Luckily, there are a few simple ways to buy affordable life insurance without skimping on coverage.
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1. Opt for term life insurance
If you’re debating between different insurance types, term life insurance is almost always your best bet. Affordable and straightforward, term life insurance is designed to protect your family during a specified period of time (typically 15 to 30 years). If you die during your policy’s term, your beneficiaries receive a tax-free payout and if you don’t, the policy expires.
Here’s a breakdown of term vs. whole life insurance.
You may be wondering why whole life insurance isn’t the better option since it provides you with lifelong coverage, but the reality is, permanent policies are generally 5x to 10x the price of term life and are basically a combination of insurance and an investment product. Unless you have unique circumstances (like intricate estate planning needs or a special needs dependent), term life insurance is your best bet.
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2. Compare quotes
Did you know that comparing life insurance quotes can save you up to 40% on a policy? You compare prices on flights and hotels — why not insurance?
Shopping around can save you a ton of money in the long run. Here’s a breakdown of the average cost of life insurance by age.
Image Credit: DepositPhotos.com.
3. Buy early.
If you’re in your 20s or 30s, you might not be thinking about purchasing life insurance just yet, but it turns out now is the time to shop. Prices go up 8% to 10% every year you age, so now really is the best time to buy!
And it may not be as expensive as you think. A healthy 30-year-old can typically get $1,000,000 in coverage for under $30 a month.
Not sure how much coverage you need? Try this easy tool.
This article originally appeared on Policygenius and was syndicated by MediaFeed.org.
Image Credit: DepositPhotos.com.
