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How can I save money on a life insurance policy?

Life insurance can be a very expensive investment but one that can secure your family’s future for years to come if the worst happens.  There are many different types of life insurance policies, but in very broad terms they can be divided into two types: term life insurance and whole (or permanent) life insurance.  The difference is simple.  If you take out a term insurance policy and you die within this term your beneficiaries will receive a pay out but if you outlive your policy you won’t receive anything.  With a whole life insurance policy your coverage is assured until your death, therefore your family is certain to receive the pay out.  Needless to say, however, whole life insurance is considerably more expensive than term life insurance.  Not only that but it is also a great deal more complicated and often has savings schemes of varying degrees of risk attached to it.  Therefore, term life insurance policies are usually cheaper than whole life insurance policies and providing you die within the term the ‘rewards’ are pretty similar.

If you are going to take out a life insurance policy it is vital that you get the best priced premiums possible without sacrificing on the coverage that you require.  Prices can vary by as much as 50% so if you are going to get the best deal for your money it is crucial that you look around and don’t just accept the first policy that you see.  Haggle with agents – if they won’t lower their price you can probably shop elsewhere.  Price comparison websites are always a good resource too and can give you an idea about who you might be able to get a better deal with.

There is of course a better way to save money on your life insurance policy and consequently on your lifestyle too.  If you are a smoker your insurance premiums will be higher than if you don’t smoke for the simple reason that smoking kills and you are therefore more likely do die within the term of your insurance.  So now you have an incentive to quit smoking – you will be better off financially in the short term without having to buy cigarettes and your insurance premiums will also come down.  However, the biggest advantage is of course that you will hopefully prolong your life by improving your health.  The same applies for alcohol and any other health situations which you can do something about if you try hard enough.

Most life insurance companies also offer critical illness cover as part of most life insurance policies.  This does, of course, add a considerable cost to your life insurance policy, but as so many people contract some kind of critical illness at some point during their career that it could prove to be money well spent.  Although the costs will be higher, should you become too sick to work you could leave yourself in an even worse position than if you hadn’t included it in your policy.

Disclaimer: The information contained on this page is not intended, nor should it be construed as providing any form of financial advice or guidance as to which insurance product/policy is right for you. If you are unsure as to which product meets your requirements/needs you should always seek advice from an Insurance Professional.

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