Tips for Saving Money on Permanent and Term Life Insurance

Whether you're looking to buy permanent or term life insurance, or even over 50s life insurance, there are things you can do to save money. While life insurance may not be a subject that's fun to think about, nonetheless it's important to have sufficient coverage to protect your family. Consider the following tips to secure good coverage and lower the price you pay for insurance.

Shop Around
Make sure you're paying the best rateshop around and get life insurance quotes from various companies. It's easy to get life insurance quotes quickly by using quotes services online. Be sure to focus on financially sound companies with high ratings from at least two rating agencies, such as A.M. Best, Weiss, Moody's or Fitch Ratings. While you're shopping, you should research to determine which rate class you'll fit into and get an idea of the premium you're likely to pay. For the most favorable rates, you should maintain a healthy weight and exercise regularly, and don't smoke.

Consider Net Cost Index
To compare two policies, consider the net cost index, which, according to Insurance Information Institute is "a standard method for collapsing [premiums and cash value] into one number" (www.iii.org). A net cost index, for example, will allow you to compare a low premiums and low cash value policy with a high premiums and high cash value policy. You can get these index numbers from the insurance agent or company you're considering.

Pay Attention to Discounts
Be aware that many insurance companies provide lower rate premiums for specified amounts of insurance. For instance, the amount you pay for your premium may be less for $250,000 of insurance than for $200,000 because the discount goes into effect at the higher insurance amount.

Look for Renewal Guarantees for Term Life Insurance
If you are looking to buy a term life insurance policy, it's important to check for renewal guarantees so you don't have to shop for new life insurance once your term has ended. A renewal guarantee allows you to start a new term immediately after your current term ends. You may pay a higher premium, but renewal guarantees keep you from having to submit "evidence of insurability" or undergo a new health exam each term and risk paying more, or not getting coverage at all, if your health has declined (www.iii.org).

Watch out for Fractional Premiums
Generally, you have a choice about how often you pay your life insurance premium. You may pay your premium once a year, once every half-year or quarter, or even once a month. And, while paying monthly or quarterly seems great for your budget, some companies charge high prices for frequent premium payments. Make sure to ask about "fractional premiums" to make sure you're not being charged for making payments often. And, if your insurance provider does levy high charges for paying frequently, do your best to budget so you can pay your premium only once or twice each year.

Buying life insurance is certainly not an enjoyable task, but it's an important one if you want to protect your family's financial situation if you die. Use these tips to pay a smaller price for your life insurance coverage.