We've rounded up our top tips and tricks to reduce the costs of your life insurance policy. Just stick with our guidance and you'll gain reliable coverage at an affordable price.
How To Get Affordable Life Insurance In Westminster, CO
Before we dive in, it's important to note that every type of life insurance is different. From universal life insurance to guaranteed issue coverage, there are many options to choose from.
Just be aware that certain policies will automatically come with higher price tags.
1. Buy Term Life Insurance
All life insurance policies fall into one of two main categories:
- Term life insurance - These coverage options last for a set number of years such as 10, 20, or 30 years. They also tend to be the most affordable options. However, if you don't pass away within the specified time frame, your payout will expire.
- Permanent/Whole life insurance - As the name implies, permanent life insurance policies last your entire life. They usually include a cash value component too, which can be withdrawn or borrowed against throughout your life.
If cost is your top priority, buy a term life policy. These policies are almost always far cheaper than whole life policies.
Of course, it's best to have a clear understanding of the pros and cons of whole life vs. term life insurance. Term life policies are generally cheaper, but you can still cut down costs on permanent policies too.
2. Purchase Coverage When You're Younger
When insurers calculate your life insurance premiums, they'll consider a variety of factors (Investopedia). These include things like the amount of coverage you need, the death benefit amount, and your driving record.
However, your age and health are two key factors of your life insurance costs. The younger and healthier you are, the less you'll pay for life insurance coverage. And when you purchase coverage, you'll lock in your rates for the remainder of your policy.
3. Acquire The Appropriate Amount Of Coverage
As we just mentioned, the amount of coverage you purchase will dictate the cost of your premiums. That means if you overestimate the amount of life insurance you need, you'll raise your costs considerably.
On the flip side, it's also easy to underestimate how much coverage you actually need. Inadequate coverage could potentially leave your beneficiaries without the support they need if you pass away.
As such, you need to be careful when setting your life insurance coverage amounts. A good rule of thumb is to use the DIME formula. DIME stands for Debt, Income, Mortgage, and Education, which all need to be considered when calculating your coverage amount.
For this formula, make sure you add:
- All your existing debts
- Your annual income multiplied by the number of years you estimate your dependents will have to live off of it
- Your remaining mortgage balance
- The estimated future education costs for your kids
The DIME formula will provide you with a rough estimate for your appropriate coverage amount.
4. Follow The Ladder Strategy
Your life insurance needs won't stay the same forever. Over time, your children will need less financial support, your debts will decrease, and you'll no longer require $600,000 of coverage.
This means you'll be paying extra in the future for coverage that you don't need. The ladder strategy can help you account for these gradual life changes and save you money in the long run.
With the ladder strategy, you'll purchase multiple policies with varying coverage amounts and term lengths. For instance, you could purchase a 10-year, 20-year, and 30-year policy that provides $200,000 of coverage each. This way, you'll start with $600,000 of combined coverage which will decline as your policies expire.
This approach decreases the amount you pay over time. In fact, you may even spend up to 50% less on life insurance by laddering smaller policies instead of buying a larger one upfront (Policy Genius).
5. Limit Policy Riders
If you want to get the most out of your insurance policy, consider adding riders to your coverage. Policy riders are benefits that provide additional coverage in certain situations. Here are a few examples of life insurance policy riders:
- Long-Term Care Rider - Coverage for monthly nursing home or home care payments, if the insured requires that kind of care.
- Family Income Benefit Rider - This rider provides a steady flow of income to family members in the event the insured dies.
- Return of Premium Rider - With this rider, you'll pay a marginal premium and when your term ends, your premiums are returned to you in full.
These riders are great additions to any life insurance policy, but they will cost you extra each month.
Request Your Quote For Affordable Life Insurance In Westminster, CO
If you're looking for affordable life insurance coverage, you've come to the right place. At Adler Insurance, our agents are on your side. We'll go the extra mile to acquire the most affordable life insurance coverage for your needs.
Contact Adler Insurance Group today to get your FREE quote for life insurance in Westminster, CO.