Cutting the Cost of Life Insurance – 5 Tips for Finding Value Without Going Underinsured
You want to be properly insured, but you don’t want to spend a fortune. Let’s see how to strike a balance between the two.
Trying to find the best possible Life Insurance policy for the lowest amount of money possible is an age-old conundrum.
You don’t want to spend too much. But at the same time, but some policies available in the market could leave you underinsured.
However, there are a lot of factors that can influence the price of your insurance. Your age, occupation, lifestyle, and medical history all play a role.
Finding an insurance policy that gives you good coverage for a good price can be tough. Especially if you’re unsure what to look for in an insurance policy. You can find a good deal with a reputable insurance company and be properly insured. But you need to know where to go and what to look for.
Here are some tips that can help you with your search.
#1 – Understand Your Own Needs
Most insurance companies offer a wide range of products – but you probably don’t need all of them. The problem is that a lot of buyers tend to rush the process of choosing their policy.
If you don’t assess your situation properly before making a deal, you can end up of covers that you’re not going to need.
For instance, life cover for new parents will provide protection at a time where there are added financial responsibilities. Or, some people may opt for Income Protection to protect their earning potential, it’s important to consider your circumstances, your earning potential, savings and debts. Click here to assess your Life Insurance needs with NobleOak’s Life Insurance Calculator.
#2 – Check Products and Prices with Multiple Insurance Providers
It’s always a good idea to check prices and policies with multiple insurance providers before you make a decision. Make sure that you look through and research every detail of the policy, too.
Sometimes a policy is cheaper precisely because it contains a lot less value and benefits.
You can also consider modifying your policy afterward or add additional cover types.
If you’ve recently experienced some positive changes in your life, it might be time to think about changing your policy. Maybe you’ve altered your lifestyle or changed jobs. You can use that to your advantage in renegotiating an existing policy.
Always consider the Product Discloser Statement (PDS) to make sure you understand the product and PDS that there aren’t any hidden pitfalls when you’re considering an outwardly favourable offer.
#3 – Address Common Risk Factors
When calculating your premium, insurance providers will consider a number of risk factors. These determine the risk of the insurance company becoming liable. Of course, the premium goes up with each risk factor that the insured presents to the insurance provider.
A lot of these factors will be out of your control. Your age, gender, and family medical history aren’t anything that you can change.
On the other hand, there are other risk factors involving your life choices that you can do something about. These include:
- Smoking can increase premiums by 40% to 50% in some cases.
- Excess Body Mass Index (or Obesity) often impacts the price. Work on getting rid of those extra kilos.
- Health is of course a key factor. Drinking less, eating healthier, staying active, etc. will improve your medical record. Especially in relation to chronic diseases that are likely to increase your premium.
- High-risk Hobbies, including sports like skydiving, scuba diving, paragliding, and mountain climbing, increase your chances of bodily harm. You’d represent a high risk, and some insurance companies might even refuse to take on your policy. If you want to save some money, consider switching out any adrenaline-pumping hobbies for the low-key ones.
#4 – Opt for Guaranteed Premiums
The premium payment dilemma is a common pitfall for new life insurance buyers. There are two common premium options for life insurance: guaranteed and renewable. Which one is the best choice?
Here’s the deal. Guaranteed premium payments may be more expensive. But your premium won’t change over the length of the policy (except to account for inflation and tax rate changes).
If you go with renewable premiums, you’ll be paying a lower price at first. But that’s likely to change significantly over the years. As you advance in age and your health changes accordingly, the price will go up. And it will often go up more than if you had gone with guaranteed payments.
That’s especially the case if you live a long life well into the term of the life insurance. And this is, presumably, exactly what you’re planning to do.
The point is to calculate and think everything through before you decide.
#5 – Stay Insured While Saving Money
If you’re 35 or older, particularly if you’re in your 40s or 50s, you might want to think about getting a Life Insurance policy. And if you look around, you can save money in the process.
Noble Oak is an award-winning life insurance company that offers a range of life insurance types and policies to fit all of your needs. Get a FREE quote today and you’ll find that it’s possible to get top value for your money.