Updated: Aug 24, 2018
‘Saving money’ is a term, ingrained into any shopper’s DNA. Be it new furniture, new shoes or simply just a packet of chips, finding and getting a great deal is a mini victory in life. This should not be any different for life insurance. Everyone searches for the most affordable premiums that provide the most optimum coverage. And, thanks to the technological advancement we have today, price comparison sites are usually just a Google search away. That being said, price shouldn’t be your only criteria when it comes to insurance; not when your family’s financial future depends on it. Hence, we have compiled a couple of tips to address your coverage needs, all while sparing a hole in your wallet.
#1 - Start Early
It’s good to be young. Especially so when it comes to insurance. Reason being, the youngest and healthiest applicants usually get the lowest premiums and the rates increases as you aged.
Let me give you an example.
A 25 year old millennial in good health can get a 20 year, $500,000 term coverage for $42 per month, which is less than what you would spend on a meal in a restaurant with your family. If he was 20 years older, he would have paid $221 per month for the same amount of coverage.
Health plays an important role too because the healthier you are, the cheaper your premiums. Thus, one should try to lock in their premiums as soon as possible to that their age and health status will ensure that they can maximise their savings.
#2 - Get The Right Coverage
If you were looking for a family car, you probably wouldn’t get a 2 seater convertible. Why? Because you are looking for the best deal that fits your family’s needs.
Insurance should not be any different. There is no reason for paying for a $1 million coverage unless there is a need. But, you also should not skimp on coverage that is meant to be a safety net for your family.
How do you deem what’s the right amount of coverage then?
There are several tools online, such as a financial calculator that would be able to help you analyse your needs. These financial calculators often take into consideration your financial dependents, current financial status and some basic assumptions, before providing you with a basic recommendation.
However, it is only able to provide you with a rough gauge and it might not be an accurate portrayal of your current portfolio. Hence, it is best that you speak to an advisor to find out more about your coverage needs, after all, they are the experts.
#3 - Riders
Riders are add-ons that targets specific situations for an added fee, or as part of the policy. For example, the convertibility feature allows the policyholder to convert their policy to a different type. While some may think this is a good option due to the flexibility it comes with, it often adds into the premiums for those who never, or forgot they even had this rider.
Riders may seem like a good to have option for most policy holders, ‘just in case’ it’s helpful down the road. However, do take note that riders may add on to your premiums, hence be sure you are adding riders that you think you would be glad you have should any unfortunate incidents happen.
Getting A Great Deal
Everyone enjoys a good deal, and thanks to Google, it is easier than ever to look for one. But do bear in mind that information flows both ways online, and with the right marketing, it is easier than ever for firms to get your attention with a product you might not actually need.
Thus, it is entirely up to you to understand the difference and get the best deal for you and your family. Should you still have any doubts, you could always speak to your advisor for more clarity.