Article written by PolicyMe
Cost is a big reason why some people avoid looking into life insurance. But it shouldn’t be.
Life insurance, especially term life insurance, is a lot less expensive than most people think. A 20-year, $500,000 term life insurance policy costs around $35/month for someone in their 30s. And for most people, that’s enough coverage to keep their families protected.
Here are some tips to save on your life insurance policy.
- Buy Term, Not Permanent
Term life insurance is the simplest and most affordable form of life insurance. It pays out a benefit to your beneficiaries if you pass away within a specified timeframe, usually 10, 20, or 30 years. This is the best option to get protection during the years that matter most (when you still have a mortgage & children in the house, for example). For most families, this is the way to go.
The alternative (permanent policies) are much more expensive – we are talking hundreds of dollars more each month. Why? Because a permanent policy guarantees a payout, whether you die young or die old.
Most people don’t need life insurance coverage past retirement. As you get older, your family’s future expenses typically decrease. For example, your mortgage gets paid off and your kids move out of the house. As these expenses drop, your life insurance needs begin to decrease too. So, if your insurance needs are only temporary, why would you pay for permanent coverage? Learn more about the different types of life insurance here.
If a broker pushes you to consider a permanent policy, get a second opinion to make sure it is the right choice for you.
- Only buy the amount of insurance you actually need
You can save money by getting precise and honest advice on both the amount of protection you need and the length of time for which you need it. The difference in cost between $500,000 and $800,000 of coverage might only be about $20 a month (depending on your age and gender), but after 20 years of monthly payments, it definitely adds up!
Get the right advice to make sure you aren’t overprotecting yourself and your family. Before buying life insurance, consider how your family depends on you financially and how they would adjust if you passed away. Better yet, complete a free online life insurance checkup with PolicyMe to figure out how much coverage you actually need.
3. Take the life insurance medical exam
Many companies offer “guaranteed issue” and “simplified issue” life insurance policies, which promise to get you “an instant approval” without a medical exam. Unlike standard term life insurance products, these types of policies don’t require you to get poked for a blood test, take a medical exam, or provide every detail about your family history. Instead, you’re approved on the spot.
That may sound convenient, but these policies cost far more than their “medically underwritten” counterparts. Just how much might you overpay by? For $500,000 of coverage, a healthy person would pay about $85/month (or $1,020/year) for a “guaranteed issue” life policy. In comparison, this same person would pay $30/month (or $360/year) for the exact same coverage with a standard term life policy.
Sacrificing a little bit of convenience upfront will pay off greatly in the long run.
- Shop around
One of the easiest ways to save money is to shop around for life insurance quotes. Get quotes from a few different life insurance companies and you’ll be surprised how much they can differ. Different insurance companies will price certain demographics more aggressively – and this is in your favour! (You can quickly compare life insurance quotes across multiple insurance companies here.)
PolicyMe is the easiest way for Canadians to get advice, compare quotes and buy life insurance online. Take a free, 5 minute, life insurance checkup today and get an unbiased life insurance recommendation with prices from the insurers you know and trust. All with absolutely no cost or obligation.