6 Easy Tips For Buying Life Insurance On A Budget

Life insurance is one of those things that every family needs at some point, but not all want to spend money on. Having it can make a world of difference if ever something was to happen to you. But without it, your loved ones could be left in a difficult position, financially speaking.

For some people, buying a policy can seem like an unnecessary expense, especially if you're on a tight budget. However, there are ways to get coverage and protect your loved ones without breaking the bank.

1) Assess your needs and budget

The best place to start. No matter how much you need life insurance, you're not going to get the most out of your policy if you don't have a clear understanding of your needs and budget. By needs, I mean the amount of cover your loved ones would need in the event of your death. And by budget – the amount you're able to pay each month for premiums.

It isn't just the case of saying “I'll take out X amount of cover”. Rather, you need to take into account your financial situation and other costs they might struggle with.

A prime example is if you have a mortgage. If you were to pass away before it was paid off, your family would still be required to make payments. If not, they could be forced to sell up.

You can even help with minute costs, such as daily expenses like groceries, utilities, and childcare. And then there's how much you're willing to pay each month or year for protection – this moves on to the next point.

2) Compare quotes from different companies

Just like any service, there are countless providers out there selling life insurance. The trick is finding one that is not only affordable, but provides a strong policy. Going straight for the cheapest quote you see is fine if you just want to pay less each month, but not so good if you want the best policy for your needs.

While the premium may be cheaper, the policy itself could have its limitations, for example, a lower amount of cover or certain exclusions. So it's worth taking the time to shop around and compare quotes from different insurance companies. You'll likely find that prices can vary significantly, even for the same level of cover.

Just remember to not only look at the premium cost, but other factors like the company's reputation, customer service, and financial stability. If you're paying into a policy, you want to make sure you're getting the best value for money, so due diligence is key.

3) Consider a term life policy

When it comes to buying life insurance, you'll often be faced with a choice between two types of cover – term and whole.

Whole life insurance can cover you for the rest of your life. All you have to do is keep paying your premiums. It's great if you want a flat-out policy for the long-haul. But because cover is virtually permanent, premiums are usually more expensive.

Whereas term life insurance covers you for a certain amount of time, which could be anywhere between five years, all the way up to fifty. The policy is dependent on you dying within this time, otherwise the policy expires and no benefits are paid out. Due to this uncertainty, it tends to be much cheaper than whole cover.

If you're on a budget, term life insurance may be the better option for you. You can choose a policy that covers you during the years when your loved ones are most financially vulnerable, such as when you have young children or a mortgage to pay. So it's a more affordable way to get the protection your family needs without breaking the bank.

4) Improve your health to qualify for lower rates

Age and health are two of the key defining factors insurers use to determine your premium. Now, if you're young and in good shape you shouldn't have much trouble finding an affordable life plan. However, if you're older or have significant health issues, then you may find yourself paying higher premiums.

But that doesn't mean you're stuck with those high rates forever. You can take steps to improve your health and potentially qualify for lower rates in the future. This could include quitting smoking, losing weight, or taking steps to manage your health condition.

Either way, it's worth making these changes not only for the sake of your life insurance premiums, but for your overall health and well-being as well. Even taking a couple of trips to the gym each week could make a massive difference compared to doing nothing at all.

5) Look at lowering your cover amount

‘The more, the better' is a common phrase, but in context, that doesn't make it true. Rather it depends on what is more as well as a whole host of circumstances. When it comes to life insurance, sure having more cover is beneficial for all parties involved, but if you're looking to save money, having less cover can help.

It all depends on your circumstances. Let's say you have a large amount of savings in place, meaning that if you were to pass away, these savings could help your family maintain their lifestyle without needing a large life insurance payout. In this case, you may not need as much cover as you may think, which could potentially lower your premiums.

On the flip side, if you have very little savings, then it makes sense to have a larger amount of cover to compensate for this. Timing is also significant. For example, if your children have grown up, it reduces the need for a higher cover amount compared to if you have a young family. 

So it's important to weigh up your financial situation and future needs before deciding on how much coverage you need. Lowering your coverage to reflect your current circumstances can help save you money on premiums while still providing the necessary protection for your loved ones.

6) Work with an insurance broker

Rather than buy from the insurer directly, you can use an insurance broker to help you find an affordable policy. Brokers don't sell policies like a standard insurance company, instead it's their job to provide advice and tools to help you find and purchase the right policy.

Brokers like Cavendish Online can help you compare quotes from multiple insurance companies, giving you a better chance of finding a policy that fits your needs and budget. They can also provide expert advice on the different types of cover available, and help you navigate the sometimes complex world of life insurance.

Working with a broker can save you time and money in the long run, as they have access to a wide range of policies and can negotiate better deals on your behalf. Plus, they can provide ongoing support throughout the life of your policy, helping you make any necessary changes or updates.

So you see, life insurance doesn't have to be expensive. If you're thinking of purchasing cover, try to incorporate some of these tips to save money on your premiums.