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Life Insurance for Those with Limited Funds

By Tes Kurtz on February 9th, 2010
Life Insurance

Term life may be the cheapest form of life insurance available, and can provide great insurance coverage if you are on a limited budget. Term insurance is cheap because you only pay for insurance coverage for a predetermined amount of time.

Here are some strategies to get cheap insurance rates for your life insurance needs.

The Younger You Are the Cheaper Your Premiums

Many term life policies are renewable, but premiums almost always increase with age. Keeping that in mind, the younger and healthier you are when you purchase life insurance the better.

Lock in affordable rates while you are young and healthy. Younger, healthier applicants received cheaper rates because their mortality risk is typically lower than many older applicants.

Pay Premiums Monthly

When you break down your premiums into small bites, it's easier to chew. A seemingly large annual premium payment, may seem more affordable when you integrate the cost into your monthly expenses. You can also break premiums into semi-annual or quarterly payments.

Reduce the Length of Your Term

By opting for coverage with a shorter term length, you may be able to get a lower premium rate for the same amount of death benefit protection. Generally, it is best to get the term length that fits your needs, but getting coverage for a shorter period of time, with a premium you can afford, is better than forgoing the coverage you need altogether.

Reduce Your Death Benefit

Cutting the death benefit isn't optimal, but it is better than not having life insurance protection at all. If you do choose to lower your death benefits to cut the cost of your premiums, it is advised that you reapply for additional coverage as soon as your financial situation improves.

Check Into Price Breaks

There are some life insurance companies that offer price breaks at certain coverage amounts. If you compare rates among several insurance companies, you might notice some insurers provides more coverage than others for less money.

Group Policies May Not be the Cheapest

Although convenient, purchasing a life insurance policy through your employer could actually be more expensive. Unless your employer provides free coverage you are likely be pay a group rate.

Group rates are based on the demographics of your co-workers. The older the people you work with are, the higher the group rates should be. Of course, if the reverse is true--you work with a young and healthy lot of professionals, while you suffer medical conditions that would increase the cost of an individual life insurance policy--then a group policy through your employer could be advantageous.

Compare Quotes

Comparing life insurance quotes is the easiest way to save money on premium rates. Although the underwriting process for insurance companies is similar, each company has a unique method for evaluating risk. You should compare quotes from multiple insurance companies to choose the best and most affordable term life insurance policy for your needs.

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