How to Not Lose Your Savings on Your Life Insurance Policy

You already understand that life insurance is important.  It’s what will help your family stay financially solvent in the event that something happens to you.  Unfortunately, unlike car and home insurance, there aren’t a lot of tips or tricks to help you save money on your policy.  That doesn’t mean, though, that you have to pay through the nose.  Here are the things you can do to find (and get!) a reasonably priced life insurance policy.

Understand Your Policy

There are two primary types of life insurance: term and permanent.  Permanent life insurance policies are available under several different coverages: whole life, universal life, limited-pay, endowments and accidental death.

Term life insurance is life insurance to cover you for a specified term of time.  It doesn’t accumulate value over time and only offers protection if the covered person actually dies.  The most common form is the annual term that is renewed every year for a period of years.  You pay the same amount every year no matter what happens to you.  This is the cheaper option if you only want to be insured for a short period of time (for whatever reasons you may have).

Permanent life insurance is a little different and a little more complicated.  The policy is active until it reaches maturity but only if the owner actually pays her annual premiums on time.  It cannot be cancelled except under some very specific legal circumstances.  Unlike term insurance, this policy accumulates value over time which means that the younger you are when you take it out; the easier it will be for you to pay in time.

Health and Life Insurance Policy Term

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Life Insurance: Michael’s story by State Farm, on Flickr.  This work is licensed under a Creative Commons Attribution 3.0 Unported License.

Your Health is a Major Factor

With all of the talk about the Affordable Care Act lately, you’ve undoubtedly grown intensely tired of hearing about “pre-existing conditions”.  Unfortunately, pre-existing conditions haven’t just been a huge pain to people trying to get health insurance (until now); they can also be a major burden to someone trying to set up a life insurance policy.  Pre-existing conditions can hike up the price of a life insurance policy by quite a bit.  In some cases, the insurance company may choose not to cover someone because they have certain conditions.  If you have a problematic condition, your best bet is to look for companies that specialize in high risk life insurance policies.  They tend to offer better policies at better rates to those whose health is questionable.

life insurance

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Your Health Insurance Coverage

Now that the Affordable Care Act is up and running getting health insurance is easier than ever and you should definitely take advantage of the opportunity because having health insurance can help reduce the amount of money you pay for your life insurance coverage.  When you have good coverage you are more likely to opt for preventative and early treatment.  This means you have a better chance of staying healthy much later in life.

Before you start gathering up your quotes, spend some time looking into the different companies and policies that are available to you.  The best decisions in life are educated ones.

Good luck!

Tom
 

Arnel Ariate is the webmaster of Money Soldiers.

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