A life inusrance policy is a lifetime commitment. Therefore, saving on your policy premium at the beginning of the contract can end up saving you much more by the close of the policy term. It is therefore important that you seek out ways on how to save money on life insurance so as to pay the least possible premiums while not compromising on the coverage. Below are five tips that will assist to get the best value for your money when it comes to a life policy:
1. Have a financial plan
Before you seek ways on how to save money on insurance, it is important that you first come up with a long term, mid term, and immediate financial plan. The plan does not need to be as detailed as the one of a big corporation. However, it is imperative to have a general direction on how you want to handle your finances, investments, and major purchases. Such a plan will help you know what type of insurance to purchase and when to buy one, when to buy a house, where to invest your money, and such like decisions. There are various financial goal planning tools available on the internet and you can search for one that fits your needs. From this financial plan, you can better choose the type of insurance policy to go for and from there, you can seek way on how to save money on a life policy.
2. Permanent life insurance policy
One life insurance policy that you may consider is permanent life. Permanent life insurance consists of policies such as whole life and universal life policies. Permanent life policies give you a lifetime cover and therefore, your beneficiaries are guaranteed of the sum assured irrespective of when you die. Universal life is similar to whole life in that it is permanent but it comes with the advantages of flexible premiums and interest on invested cash value. One of the tips on how to save on insurance with these policies is to take a loan against the cash value as soon as you are eligible. You can then invest the loan in alternative investments. This type of loan does not affect your credit rating in anyway and for universal life, you are not even required to repay the loan.
3. Separate insurance and investment
Another tip for saving on life policies is separating investment with insurance. In this case, you will take a term life insurance policy and then invest your other funds in various investment vehicles. Term life insurance policy is very cheap when compared to the other policy options. You can then choose to invest the funds in various ways such as increasing your mortgage repayments, investing in bonds and stocks or other investment options. This is s preferred way on how to save money on life insurance recommended by most financial planners.