How to Buy an Affordable Life Insurance Plan

Many people do not give serious thought to life insurance mainly because they assume life insurance is too expensive, especially when the cost is considered in the context of an already stretched budget. But this need not be so because life insurance can be affordable, especially if you follow the below-mentioned tips:

Decide How Much Coverage You Need

First, you need to clearly understand how much coverage you will require, as this will determine how much you will have to pay. Many experts recommend having coverage between 5 or 10 times your annual salary (you may want to opt for more if you have a lot of debts or liabilities). Although this may make it appear terribly expensive, it can be quite affordable, especially if you are young and healthy.

Start Early

Life insurance is always less expensive for the young. This is because you don’t pose much of a risk to the insurance company when you are healthy and young. Given this, make sure to purchase your term insurance plan as soon as you can. Delaying the purchase by even a year could increase your payable premium.

Term of Insurance

It’s a good idea to assess your anticipated life insurance requirements and choose a term that provides the coverage you seek at an affordable premium. For instance, if you have young children, a 20-year or 30-year term would make sense because you would be getting life insurance coverage while they are dependent on you. If you have, say, 25 years left on your mortgage, a 25-year term policy will financially protect your family until the mortgage is fully paid off.

Compare Rates

Each insurance company has its own standards to determine premium rates, so it helps to shop around. An insurance broker can also help you in finding the right coverage at a price affordable to you. Remember that it isn’t just the premium that you need to consider when buying a life insurance plan. It’s also a good idea to ascertain the financial health of the insurance company that you are considering buying your policy from, and make sure to also check just how good the insurance company’s claim settlement and customer service processes are.