Life Insurance Buying Tips You Didn’t Know
If you shopped for life insurance frequently, you would know what to look for in a policy and how to get the best value for your money. But most of us buy life insurance only once in our lives — and may never know the mistakes made in the process. Below are five strategies for buying life insurance that can help you “hack” your way to better coverage or lower prices—strategies known by industry insiders.
Consider if Buying More Would Be Cheaper
Many people buy groceries in bulk to score discounts, so why not use the same strategy while buying life insurance? Typically, insurers have thresholds where the “cost per thousand dollars” in coverage can go lower. Here’s what that means for you: There’s a possibility that your annual premium could be lower when buying a bigger life insurance policy. However, keep in mind that bands exist, they differ from company to company, and companies provide price breaks at different levels.
Work with An Independent Agent
For many consumers, taking a do-it-yourself approach to buying life insurance is a great option. But if you’re not in perfect health, the process might be complicated. Insurance companies charge different rates for people with various medical conditions and other risk factors. In life insurance, your health rating is a key factor in determining what you pay in premiums. You should go with the company that’s most accommodating of your health condition.
Independent agents will help you compare policies from many different companies. A good independent agent can also find insurance companies that offer better rates for people with a high-risk occupation, travel plans, or other risk factors.
Add a Chronic Illness Rider for No Additional Cost
Essentially, a rider is an add-on that can be attached to a life insurance policy. While many riders aren’t worth the price, a chronic illness rider offered by some companies can be added for free. However, it is available for permanent life insurance policies only.
If you experience a chronic illness, this benefit will allow you to use the life insurance policy’s death benefit early. The rider does not increase the amount of money that your policy will pay upon death—instead, it allows you to use some or all of this benefit prior to passing away. The remaining funds would go to your beneficiaries.
