Life insurance is important – it will cover funeral expenses and support your dependents in the event of your death. Many people don’t think they need life insurance, but it’s always important to have, because you never know what’s going to happen, and you don’t want to leave your dependents without the support that they need. A common reason people avoid buying life insurance is because they think it won’t fit into their budget. However, life insurance is actually more affordable than most people think it is – you just have to find the right plan for your needs. Here’s everything you need to know about buying life insurance on a budget.

Determine How Much you can Afford

The first step when buying life insurance is to determine how much you can actually afford to spend each month on it. Life insurance isn’t worth it if it’s preventing you from paying your rent, eating properly, or getting you into debt, so be realistic with yourself when coming up with a number. Luckily, you don’t have to be particularly wealthy to buy life insurance, despite a common misconception that it is very expensive. Many insurance companies actually offer affordable policies, some as low as $30 per month.

Term Insurance is the Most Affordable

There are different kinds of life insurance.  Whole life and term life are the most common.  If you want to find the least expensive annual premium, you should look at term coverage.  While the coverage doesn’t last forever, you can get a pretty long coverage period such as 20 years for a very reasonable price.

See if There is Anything You Can Cut Out of Your Budget

If you feel like you can’t afford life insurance, take an honest look at your budget and see if there’s anything you can cut out of it. A good way to do this is to look at your spending over the past few months and evaluate which items you really needed and which you could have done without. Sometimes the different between affording life insurance and not is just making your coffee at home instead of buying it out, or going for a run outside instead of paying for a gym membership.

Shop around at different companies

Once you’ve determined how much you can afford to spend on insurance, it’s time to start shopping around at life insurance agencies. Look at both local companies as well as regional and national ones. Talk to insurance agents and tell them how much you can afford to spend on insurance. For help, take a look at our list of best companies. Make it clear that you’re shopping around – insurance companies want your business, and they might be willing to work with you to get it.  There is no harm to shopping for the best price.  Keep in mind that insurance companies have public financial strength ratings, so choose any company that has a good rating.

Buy Your Insurance Policy While you are Still Young

If you can, buy your life insurance policy as young as possible. Life insurance gets more expensive the older you are, so buying it while you are still in your twenties or thirties is a good way to get started with an inexpensive policy. While your rates could rise as you get older, you still will probably have a lower insurance rate than someone who started shopping for insurance in their fifties, sixties, or seventies.

Adopt Healthy Habits

It’s unfortunate but true – your health habits can actually affect the cost of your life insurance policy. If your life insurance company believes you in poor health and therefore more likely to die, your premiums will most likely be higher. Your personal and family health history will both be taken into account, and insurance companies often look at things like weight and blood pressure. Of course, you can’t always control every aspect of your health, but anything you can do to stay healthy will keep your premiums down. Just eating a healthy diet and exercising can make a big difference. One major health-related behavior that can make a big difference is smoking. If you already smoke, you should try to stop as soon as possible, and if you don’t smoke now, don’t start. Life insurance policies for smokers are drastically higher than those for non-smokers.  If you stop smoking after you buy your policy, you can usually apply for reconsideration to drop the smoker rating and lower your premiums.

Be Aware of Other Factors That Could Affect Your Policy

There are some other factors that can affect the cost of your health insurance policy as well. For example, if you have a job that involves physical risk, your insurance premium could go up. Your premium could also go up if you have hobbies that could be considered physically dangerous, like skydiving. Of course, you shouldn’t stop doing something you love to get a lower life insurance policy, but it is helpful to be aware of this. It will also help to remember that some insurance providers might consider a job or a hobby risky, while others might not. Shopping around will help you find the right fit.

Lower-coverage policies are cheaper, but that doesn’t mean you should skimp on insurance

When shopping for insurance on a budget, it’s important to keep in mind not only the realities of what you can afford, but also the realities of how much insurance you need. Of course, there are some cases where you can only afford to buy the least expensive policy you can find, and that’s okay. However, if you can afford to spend a little more on life insurance and you have dependents who could benefit from it, it may behoove you to take out a larger policy. If you’re unsure of how much coverage you need, there are online calculators you can use to figure it out.

Buying life insurance on a budget is easier than you might think. If you don’t have life insurance, now is the perfect time to start shopping for it, no matter your age or your health. With so many different insurance companies out there, you will be sure to find the right policy for your needs.

One Comment

  1. It’s interesting to know that your health habits can actually affect the cost of your life insurance policy. My sister is looking for advice about what life insurance will be better for her. I will let her know to change her health habits to make sure his life insurance policy won’t be too expensive.

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