Low cost life insurance, of course, is a relative description, but to a very great extent, all life insurance these days is relatively low cost. Thanks to intensive internet marketing, which has considerably widen the sales potential, and keen competition amongst providers, life insurance is now cheaper even in real terms than it has been for the past decade or so.
Nevertheless, if lowering the cost of the premiums is an important consideration, there are still a number of ways in which you can do this.
As with many purchases, buying the most affordable life insurance relies on choosing the most appropriate product for your needs. For example, if the main reason for your needing life insurance is to ensure that your family have the balance of a repayment mortgage paid off in the event of your death, then you might want to consider a decreasing term life insurance rather than the standard level term life insurance. Just as the name suggests, decreasing term life insurance is written with a steadily decreasing lump sum benefit payable in the event of death during the term of the life cover. Because this steadily reduces the risk to which the insurer is exposed, then premiums are also cheaper than the constant sum assured under a level term life insurance policy. Perfectly adequate protection for the repayment mortgage continues to be ensured, however, since the outstanding balance on the mortgage debt will be decreasing at a similar rate.
An important point to remember about life insurance is that it is cheaper the earlier you start – i.e. the younger you are. Although your age will provide another route to securing low cost life insurance, however, this is often a time when there is little spare cash in the young family’s budget. If that is the case, however, there is always the option of starting life cover at a cheaper rate and steadily increasing the premiums and cover as the family’s income increases over time. The choice, then, would be for increasing term life insurance, where premiums and the cover assured will increase by predetermined increments each year that the policy runs.
On a similar theme, you might have the intention some time in the future of taking advantage of using life insurance as a long-term investment opportunity by way of a whole-of-life or endowment policy. Although this could prove too costly on your present income, it would nevertheless be possible to buy convertible term life insurance that can be converted into the desired whole-of-life or endowment policy at the end of the current term, generally without having to submit further medical reports.
Though many of the products currently available are already – almost by definition low cost life insurance – there are a number of options for making the immediate premiums still more affordable. By starting at an early age you will gain yourself a head start, with cost-effective premiums and still reserve the options for increasing your overall level of cover slightly later in life, when your circumstances allow.