Facts About Life Insurance Cost
Do you think that life insurance is too expensive? If so, you're not alone. According to a recent LIMRA study, the average consumer estimates the cost of life insurance as being twice as high as the actual price. In fact, this is the main reason that many give for not purchasing a life insurance policy at all. While coverage is surprisingly affordable, several factors influence life insurance cost. These include your age, current health, driving record, hobbies, and even your credit history.
Paying for Your Life Insurance Policy
When you select a life insurance policy, you'll want to do a needs assessment so that you get the proper amount of coverage. This evaluation will take into account your current resources and the amount that could be needed in the future for such things as income replacement, burial costs, retirement, college education, and debt payoffs.
The amount of life insurance that you purchase should also consider your current (and future) budget as a life insurance policy is usually a long-term contract. To make sure that your policy remains in force, you'll want to consider setting up automatic payments and renewals for your policy so that payments are made on time each month or annually. If you don't make the payment on your policy, you could end up forfeiting your coverage.
Several options are available if you can't make life insurance policy payments.
If You Can't Make Your Life Insurance Policy Payment
Sometimes budgets and life circumstances change, making continued life insurance policy premium payments difficult. If this happens, there are several options.
- Use cash value. If your policy has a cash value component, you can tap into this built up value to pay future policy premiums. Understand that using this portion of your policy will reduce your death benefit if it isn't paid back.
- Pay with policy dividends. If you have a policy that pays investment dividends, you can use these funds to offset your premiums.
- Adjust your coverage. Many life insurance companies will allow you to lower your policy limits, which will reduce your monthly premium payment.
- Use policy riders. If you have certain riders in place, they can pay your premiums if you become disabled and are unable to make the payments for a period of time.
- Switch to term life coverage. A term life insurance policy is more affordable than a permanent life insurance policy. If you are unable to pay premiums on a permanent life policy, you might be able to convert your coverage to a term policy.
Most people today need life insurance coverage to provide for loved ones or pay expenses when they are no longer around. If the financial burden becomes too much, you'll want to re-assess your situation and your family's needs. Yet, there are ways to continue your coverage or convert it to a different type of policy. Contact us with any questions or request a quote now.