Tips for Finding Cheap Life Insurance

Cheap life insurance is out there, if you know what you're looking for. That's why it's important to do your research. You've got to educate yourself on the various types of life insurance policies that are available, including additional benefits that may or may not be offered.

Plus, you should make an effort to research your options as they relate to the various life insurance companies. It'll be to your advantage to know what you want and need in terms of cheap life insurance before you start getting quotes.

Term vs. whole life

The first big determinant of cheap life insurance is the type you select. Term life insurance will almost always cost you less than whole life insurance. Term insurance is purchased for a specific period of time, for a specific face value.

Whole life, as the name implies, provides life insurance benefits for the rest of your life, whether that ends up being 10 years or 50. Whole life insurance policies generally have a cash value aspect meaning you'll pay more in monthly premiums. The amount over and above that which is necessary to cover the premium is used for investment purposes.

Even if you do choose whole life insurance, your costs can be lower if you look around for a policy that has lower fees. The fees you want to pay attention to aren't really fees, they're commissions. Commissions can eat away at the cash value of your whole life policy. When researching, look for the term, "low load" as that generally means lower fees.

But be careful. You'll find this type of life insurance won't be cheap if you withdraw funds. When the policy's cash value is greater than the premiums paid, you'll likely have to pay taxes. A loan against the cash value may have the same end result.

Think long and hard about this type of life insurance policy; it's not meant to be a substitute for a more traditional type of investment plan. And the premiums you'll pay will be hefty.

Steer clear of guaranteed issue policies

Also when looking for a cheap life insurance policy, you won't find it in a "guaranteed issue" type of policy. These policies are guaranteed to cover anyone, regardless health. No medical exam is required but that convenience comes with a big price tag.

Because the life insurance company is taking a substantial risk by insuring individuals without knowing their state of health, premiums will be high. If you're healthy, opt instead for a traditional term policy.

If you're not healthy, taking steps to improve your health may help you find cheaper life insurance. Lowering weight, blood pressure, and cholesterol levels are beneficial steps. Kicking the nicotine habit is also advisable. The better your health at the time of application, the cheaper your life insurance premium should be.

Finally, to get cheap life insurance, purchase just what you need. Reevaluate your life insurance needs periodically and adjust upwards or down as necessary. The bottom line: Finding cheap life insurance is possible, but it does take work.