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Term life insurance: money-saving tips

Term life insurance is the most affordable way to protect your family’s future. As inexpensive as term life insurance is, there are money-saving tips that ensure that you only pay for what you need. Get the most out of your money by taking a look at the following handy tips that will save you money and still give you good protection.

1. Get early coverage – the sooner you take out life insurance, the less your annual premiums:

Some people are gamblers by nature and choose to take their risk by skipping out on life insurance. While it is unlikely that you will die during your working years, do not insure what is likely to happen, but instead, cover the worst-case scenario. That’s why the younger you are, the less life insurance costs you. It’s also why you should buy it sooner rather than later – because you will provide financial security without spending a lot of money on it.

For example, if we look at the cost of buying a $250,000 Term 10 life insurance policy, you will see how delaying the purchase of a policy by just a few years could cost you more in annual premiums.

For male non-smokers *:

A 35-year-old can get quotes for as little as $195 a year for a total 10-year cost of $1,950.
A 40-year-old can get quotes for as little as $263 a year for a total 10-year cost of $2,630.
A 45-year-old can get quotes for as little as $373 a year for a total cost of 10 years of $3,730.

For female non-smokers *:

A 35-year-old may get quotes for as little as $165 a year for a total cost of 10 years of $1,650.
A 40-year-old may get quotes for as little as $210 a year for a total 10-year cost of $2,100.
A 45-year-old can potentially get quotes for as little as $270 a year for a total 10-year cost of $2,700.

* Lowest quote online as of February 2006 for a Term 10 policy, one of the most popular life insurance products in Canada. Premiums shown are the rates if paid annually.

2. If your age is not your age:

Your next birthday maybe 6 months away, but in the eyes of most life insurers, you’ve already reached that next magic number. When you receive a quote for life insurance, the rate you get is based on the age you are closest to, 50 percent of the time is your age on your next birthday. It is a term called ‘Age Nearest’ and that price increase of half a year can be considerable. See for yourself the difference.

For male non-smokers *:

A 39-year-old can get quotes for as little as $248 a year for a total 10-year cost of $2,480.
A 40-year-old can get quotes for as little as $263 a year for a total 10-year cost of $2,630.

A saving of $150

A 44-year-old can get quotes for as little as $345 a year for a total 10-year cost of $3,450.
A 45-year-old can get quotes for as little as $373 a year for a total 10-year cost of $3,730.

A saving of $280

For a female non-smoker *:

A 39-year-old can get quotes for as little as $200 a year at a total cost of $2,000 for 10 years.
A 40-year-old can get quotes for as little as $210 a year for a total 10-year cost of $2,100.

A $100 saving

A 44-year-old can get quotes for as little as $255 a year for a total 10-year cost of $2,550.
A 45-year-old can get quotes for as little as $270 a year for a total 10-year cost of $2,700.

A saving of $150

* Lowest quote online in January 2006 for a Term 10 policy. Premiums shown are the rates if paid annually.

3. If you smoke, ask for incentive programs to help you quit:

While not all life insurance companies offer incentive programs to help you quit, some do and can save you money if you consider taking out life insurance and quit smoking. For example, such a company will refund you an amount equal to the difference between the premiums you have already paid as a smoker and those you would have paid if you had not smoked. Also, once you stop smoking, the same company will adjust your premiums to non-smoker rates based on the age at which you bought the policy, not the age at which you quit!

4. View your payment/billing options:

Many life insurance companies offer discounts to consumers who pay their annual premiums in advance. If you have the money at hand, you can save up to 10 percent of your annual premium. For example:

– A 35-year-old man with $250,000 coverage can prepay $195 a year for life insurance. However, if paid in monthly installments, the annual premium jumps to about $215. Paying in advance can save this person $20 a year!

– A 40-year-old man with $250,000 coverage can pay $263 a year in advance for life insurance. However, if paid in monthly installments, the annual premium jumps to about $288. Paying in advance can save this person $25 a year!

– A 45-year-old man with $250,000 coverage can prepay $373 a year for life insurance. However, if paid in monthly installments, the annual premium jumps to about $407. Paying in advance can save this person $ 34 per year!

Life insurances made even more affordable:

With these money-saving tips in hand, Term Life insurance is more affordable than ever. There is no better time than now to get the coverage you and your family need.

Related Article: Whole life insurance – Tips and Benefits

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