Saving On Your Life Insurance

By Compuquotes Team on March 26th, 2008

No one likes to shop for life insurance. It is actually something we'd prefer to not have to think about. Once you figure out how to compare one policy against another and choose the policy that provides adequate peace of mind, as well as financial security, you can cut corners.

We all need life insurance the question is how much do we need? It is all based upon your circumstances. If you have small children you will likely want more coverage. Do you have investments that could keep your survivors living comfortably, or would your death put them in debt? Are your home and vehicles paid off?

Experts agree that your survivors will be financially safe if you are covered for eight times your annual salary. If you have two or more children under the age of ten some experts suggest you aim higher than eight times your salary until they are eighteen.

Commonly, the best insurance deal around is through your personnel office if you are employed full-time. Most companies offer life insurance as a perk of their benefits package offering your family with twice your annual salary or more, in the event of an untimely death. Some companies allow workers to buy supplemental insurance at reduced group rates.

For many people, term insurance provides adequate protection without the costs that are associated with the cash buildup of whole life policies. This is because a whole life policy acts as something of a bank account: your premium payments build up into a cash reserve, and you can borrow against the reserve during your life. If you don't pay back the money before your death, your survivors would receive much less. These policies do earn some interest, but not nearly as much as you could get by investing that money yourself.

The biggest advantage is that term life insurance premiums are incredibly lower as little as $3 per $1,000 in coverage.

If you would rather stick to a cash value policy there are still ways to do it cheaper. A great way to achieve this is to go with a �no-load� policy. These policies are sold without agents, so there is not a commission involved. You accumulate cash value the first year, as opposed to traditional whole life policies where the agent gets your first year's entire cash buildup as his commission.

Since there is no commission to be paid, you get a better deal on your policy. No load policies are on average twenty percent cheaper that cash value policies.

A great way to cut the cost of your life insurance premium is to cover two people under a joint policy. You can cut the price by about 35 percent if both you and your spouse get a new type of policy called first-to-die insurance. With this life insurance policy two or more people are covered under the same policy. It pays out when the first person dies.

Single first-to-die policies are more expensive than a single term policy but about one-third of the cost of covering two people under two separate policies.

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