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Life Insurance Hacks: 7 Tips to Save Big and Still Get Maximum Coverage

Life insurance is crucial for financial planning, safeguarding family and business assets. Policies may offer borrowing options, tax-free payouts. Explore 7 tips for affordable coverage amid potential cost challenges.

Life insurance is a key component of every financial plan. Having adequate life insurance can protect your family after your death and save other assets like a small business that employees are dependent on. Some insurance policies even allow you to borrow money without penalty and their payouts are usually tax free for your beneficiaries. 

But life insurance can be expensive depending on a number of factors. Here are seven ideas for keeping your costs down while being sufficiently insured. 

1. Give Up Risky Business

According to The Ascent, hobbies like skydiving or scuba diving can raise rates dramatically. That’s because insurers calculate the risk of having to pay out a claim when they establish their rates. 

2. Improve Your Health 

Unhealthy habits like smoking tobacco or marijuana can increase your rates. Staying healthy, including maintaining a healthy weight and having regular checkups, can keep your premiums lower. A medical exam may be part of the life insurance purchase process. According to GoBankingRates, even losing a few pounds can get you a better rate.

3. Buy When You Are Young 

The least expensive time to get life insurance is when you are still in your twenties or thirties. According to Kiplinger, your policy is more likely to be affordable if you are “young, fit and healthy.” Investopedia offers some pros and cons to buying life insurance early. 

4. Consider Term Life Insurance 

Term life insurance covers you for a specific period of time, usually a round number like 10 or 20 years. According to Forbes, it is generally the cheapest kind of life insurance. Unlike a permanent policy, however, you can’t borrow money because it has no monetary value like an interest-bearing, permanent life insurance account would. Talk to an insurance agent or do your research on the pros and cons of the different types of life insurance to know which is a good fit for you. 

5. Purchase a Joint Policy 

A joint life insurance policy may be more cost-effective than individual ones. It is a single plan that covers two people and pays out when one or both die. According to Money.com, a joint life policy minimizes paperwork, underwriting and administrative costs associated with life insurance policies and those savings are passed on to the consumer. 

6. Bundle Up 

A bundled insurance policy can save you money. If you already have home and car insurance through one company, ask about adding life insurance to your policies. According to Motley Fool, bundling not only saves money but is more convenient since you’ll have just one company, bill and statement to deal with. 

7. Build a Ladder 

Since your costs change over a lifetime, some people save money on life insurance premiums by buying several smaller term policies of varied lengths, according to Forbes Advisor. The ladder method allows them to have the most coverage when they have the most expenses like a mortgage or college tuition costs. It is not for everyone, so check with your insurance agent or do your research to see if this strategy is a good fit for you. 

If you are concerned about how much you can afford, remember that having some life insurance is better than none, so don’t let your worries stop you from purchasing this important part of your financial plan. Using the seven tips above can save you money and there are many websites that let you easily compare insurance costs and companies, so you can find the policy that works best for you. Leaving money behind to help pay the bills and/or for funeral expenses when you pass away is an important part of your end-of-life planning.

To learn more about life insurance, visit our other article: 10 Surprising Benefits of Life Insurance You Never Knew About.