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How to buy life insurance on a budget

We all look at our expenses today. How to fit life insurance into your plans.

Life insurance is a bit like clothing, as it is an essential part of a person's life. In addition: That you have an almost unlimited range of options and that you can spend a wide range of money on these options – from bargain card finds to tailor-made clothes made with the finest and rarest fabrics.

But just as no one really needs to say a bespoke cashmere jacket with gemstones and egg yolks of Faberge eggs (we guess), it's unlikely you'll need the most valuable life insurance you qualify for (and the higher premiums that will come). with it). And just like that store cardigan comes with a few holes, you will save money when you buy a cheap policy – but it can give you less coverage than you want when you need it most.

So how do you find the right policy for you? And how do you make sure you get the most affordable interest rate? We're so glad you asked. Here are our tips for finding affordable life insurance in a budget.

In this article:

Decide what type of life insurance you need

As with anything else you can shop for, the first step is to zoom out and learn what your options are. So let's first define life insurance. In short, it is a policy where the customer pays a regular premium, usually every month, in exchange for a financial payment if and when the policyholder dies. This money, in turn, can help offset a whole host of costs, from funeral expenses to college education for all the children that the deceased has left behind.

Bigger picture, what happens is that customers pay premiums to the life insurance company, which uses the money to pay out these death benefits (and cover the costs of administering their life insurance policies). Insurers use insurance charts to determine how likely a customer is to pass away after a certain period of time, based on factors such as the customer's health. All this is done to ensure that when a customer dies, there is money in the fund to cover the death benefit.

So why get life insurance? Because as we all know, sometimes the unexpected happens. And should something happen to you, you can have a life insurance policy that can help your loved ones pay for everything you leave. This includes immediate one-time needs such as the cost of a funeral. It also includes long-term, ongoing needs such as compensating for the loss of your income. If you have outstanding debts – from your college loans to your mortgage – your beneficiaries can use the money to pay them off. When you take out a life insurance policy, you hope you never have to use it. But if the worst happens, you'll be glad you did.

So who needs life insurance, and when in life should you think about it? Some examples:

  • You are a new parent (or planning to start a family).
  • You use your income to pay (or help pay) the bills for your family.
  • You are worried about leaving behind an economic legacy.
  • You and your partner or spouse share financial commitments, such as a mortgage.

So what are your options? Let's start with these.

Long-term life insurance

True to its name, the term life insurance is life insurance with a definite term. Usually you take out a policy that covers a certain period of time – normal periods of time are 10, 15, 20 and 30 years – during which your beneficiaries will receive a death benefit if something happens to you. Yes, the term ends, which is why many people choose a period that coincides when their spending drops – for example, after their children finish college. If you are still alive when the term expires, you will not receive any payment. But you are still alive, which should provide some comfort. (At least we hope so.

An important benefit of life insurance is that the price is usually fixed throughout the period, something called guaranteed premium premiums. That is, the premium you pay in month one will be the same amount you pay in the last month of your period (and every month in between). (This is why many professionals suggest that you get life insurance when you are young and healthy, as it will help you lock in a lower interest rate throughout your coverage. A little more about that.) This consequence helps you budget for the future, and also means that when you take the time to get insurance, you do not have to worry about it as long as you keep making payments. A few decades' worth of peace of mind? Invaluable.

Add everything, and life insurance is one of the most affordable types of coverage out there.That's also why it's the most popular, especially if you have a budget.

Permanent life insurance

Also known as whole life electricity smiles universal insurance is permanent life insurance exactly that: Permanent. The policy will last your whole life. A permanent life insurance policy usually also has a cash value that can grow or shrink over time, which is why it is best if you work with an economy when considering whether it is right for you. Because it lasts your entire life and builds cash value (unlike forward insurance), the tax rates are higher than what you would pay for life insurance, anywhere from 5 to 20 times as much as a life insurance policy.

Decide how much life insurance you need – and how much you can afford

If you have read that far, you probably think that life insurance sounds like a good idea. You may even think that life insurance is the right fit for you. Good! But the next question is: How much do you need? Well, you've come to the right place.

A rule of thumb for determining your life insurance needs

The reality is that what is affordable for one person can be expensive for another, and vice versa. This is why there is a quick rule of thumb that most people use when deciding how much insurance to get. Take your annual income. Multiply that by five or even ten. And there you have it: A good starting point for understanding how much life insurance you may need.

Why that number? Think about it. If something were to happen to you, your annual income would be $ 0. But your annual expenses may remain – think of any outstanding debts you may have. And your loved ones – your children, whether you have them, your partner or spouse, even an aging parent who is counting on you financially – will continue. A life insurance period is one way to mitigate this blow by creating a source of income (usually a lump sum, usually tax free) that helps your family take the financial blow of losing your salary. (This will also give them one less thing to worry about during an already stressful period of grief.)

Let's be clear: You should run the numbers before committing to the back of the envelope math. And there is such a thing as too much coverage. (Didn't expect to hear it from a life insurance agency, right?) But if you're the biggest breadwinner in your family, you may need more coverage. If you are a stay-at-home parent, you may need less. (Although you probably still need a little, because even though you may not earn a salary, you still provide value to your family, who may need some form of paid child care in your absence.) But the basic idea is to give you a window of roughly which type of coverage you need. At Haven Life, you can buy insurance for $ 100,000, or you can go up to $ 3 million.

To find out how much coverage you need, start with an online life insurance calculator.

Choose the right term length

So you have decided how much coverage you need. But how do you decide how many years of coverage you need?

In a way, it starts with where you are on your journey in life. If you are close to the beginning – for example, a newlywed or just starting a family – you want to consider a longer term. It is simply because you have many years ahead of you where someone will rely on you financially. (The good news is that although a longer term will of course cost more overall, the younger and healthier you are when you apply, the lower the premium may be.)

If you are later in life or even see out to bridge the gap after your existing life insurance no longer applies, you want to consider a shorter term. Maybe your mortgage took longer to pay than expected, or maybe you had another child later in life (really the best surprise). Whatever the reason, a ten-year period is usually the shortest available.

And one last factor to consider here is your budget itself. The reality is that a 20-year policy will cost less than a 30-year policy, and 20 years of coverage should still last until your children are adults and out of the house. You may also be better positioned in 20 years to take out a ten-year insurance policy, again to bridge the gap.

A place to start: An online life insurance calculator that can help determine how much coverage is right for you and your loved ones.

Shop for the best fit for you

Smokey Robinson sang it, every financial blog recommends it, so we say it too: You should shop. There are more options, online and off, than ever before. It can be overwhelming, so here is what to look for and what to think about.

Compare Prices

If you have a budget, it's probably your top priority. (Also, you know, get insured.) The magic phrase here is "guaranteed level premium." This means that you pay the same premium throughout the term, which is an easy way to lock in a predictable monthly cost to become insured. There are many other factors that play into what you will ultimately pay, including your age and your health. But it's smart to start by getting a quote from each of your insurance options and see what's best.

Life Insurance Quote

30 Male Excellent $ 500,000 ] 30 $ 36.26
30 Female Excellent 1,000,000 $ 30 ] $ 54.46
35 Male [19659043] Excellent $ 500,000 20 $ 23.34
35 Female Excellent $ 750,000 20 $ 27.49
40 Male Excellent $ 600,000 15 $ 26.29
40 Female Excellent $ 800,000 15 $ 33.05 [19659084] Life Insurance Certificate of Life for the Medically Insured Haven Term Policy Issued by MassMutual. Coverage is available up to $ 3 million.

  Haven Life Logo

Read Customer Reviews

When signing up for, at least, a ten-year commitment, it's wise to see how others rate their experience. Is it easy to get in touch with customer service? Was the application experience hassle-free? Are customers happy with their life insurance premiums? You would not move into a new house without seeing it for yourself and checking out what the schools are like. An insurance is an equally large and long-term investment. There are usually no reviews on a house, but there are for life insurance providers. Use.

With Life Insurance, you can consult customer reviews online through Google or services such as Trustpilot. But there are also third-party credit rating agencies that consider a company's financial strength and its ability to pay for receivables.

Do some homework

When you buy a t-shirt, you hope it will last you a few years. When you buy life insurance, you probably undertake 10, 20 or even 30 years of coverage. This means that you want to be sure that you are buying insurance from someone who will be there at the beginning and end of your period

One thing is to take into account the history of who you are buying insurance from. If they have been around for a long time, it is likely that they will be around for a long time. That experience can give peace of mind.

Of course, it is often the younger, newer devices that are most innovative. Take Haven Life, an insurance agency that makes life less difficult by taking an online first strategy – you can do everything from getting a quote to applying for insurance online. Haven Life is also supported by MassMutual, an insurance company with more than a year and a half of experience. It really is the best of both worlds.

  • Anything to acquire the mood that my family is taking care of because of something I did in a very short time was well worth it. From answering pre-qualification questions online to going to the medical examination in town, I have had to work with a team of really nice professionals.

  • fantastic company, easy to work with.

  • Wow! I have life insurance and it only took 15 minutes! The process was simple, fast and painless. Now it's my type of life insurance! #GoHavenLife … it's (almost) like my birthday!

  • The Haven Life company offers a great price and a very easy to use process with an easy website to access. This is one of the best sites to use. I highly recommend this company.

  • The process of applying for and filling out the paperwork went very quickly and efficiently.
    I would definitely recommend Haven Life to my friends and family.

Get insurance while you are young and healthy

One reason why you get life insurance: No one knows what tomorrow will bring. It is also a good reason to get life insurance as soon as possible in a humane way: You will never be as young as you are today, and there is always a chance that a health problem is around the corner.

With the gloomy warning out of the way, let's turn to a celebration of your youth and good vitality. (And why not, your charm.) The point is that you are attractive to insurers when you are young and healthy because it means you are likely to live a long time. Again, the future is unknown, but the result of this is that you get the lowest possible interest rate, because the insurers want someone like you in their pool. Two things to keep in mind:

If you smoke, start the habit

This is just good advice. But it is also worth noting that being a smoker usually means you pay more for life insurance. (Some experts estimate as much as two to four times as much.) It is in addition to the hit that buying cigarettes already takes on your wallet (and the possibility of an even bigger hit in the form of medical bills along the way). Take it from us: Quitting smoking is good for your body and good for your budget.

If you jump in skydiving, kick the hobby

Call us killjoys if you have to, but the reality is that dangerous hobbies will increase your life insurance premium. (And failure to disclose them may mean that your insurance does not pay off and leaves your loved ones drunk after you lose your grip during your next free solo adventure.) If you want the best possible price on your life insurance premium. , you need to get your kicks done like the rest of us do: Watch others perform death-defying stunts on YouTube.

Apply And Find The Best Price

And then comes the final step: Once you've done your research, simply start your life insurance application. From there, you get a real interest rate and the opportunity to decide if it fits your budget. If not, keep shopping. If so, congratulations: You are gaining peace of mind for yourself and for your loved ones, who come with every term life insurance. Even better is that peace of mind is included for free.

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About Louis Wilson

Louis Wilson is a freelance writer whose work has appeared widely range of publications, both online and in print. He often writes about travel, sports, popular culture, men's fashion and grooming and more. He lives in Austin, Texas, where he has developed an unlimited passion for breakfast tacos, with his wife and two children.

Read more by Louis Wilson

Our Editorial Policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and general well-being can be refreshingly easy.

Our Editorial Policy

Haven Life is a customer-centric life insurance agency that is supported and wholly owned by the Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and your general well-being can be refreshingly easy.

Our content is created for educational purposes only. Haven Life does not support the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they suit your situation.

Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to be provided and should not be relied upon for tax, legal or investment advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Our information

Haven Term is a term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual. Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a simplified Life Insurance Issue (ICC19PCM-SI 0819 in certain states, including NC) issued by C.M. Life Insurance Companies, Enfield, CT 06082. Numbers and functions for insurance and equestrian forms may vary by state and may not be available in all states. Our agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best company as A ++ (Superior; top category 15). The rating is from Aril 1, 2020 and may change. MassMutual has received different ratings from other rating companies.

Haven Life Plus (Plus) is the marketing name of the Plus Rider, which is part of the Haven Term policy and offers access to additional services and benefits free of charge or at a discount. The driver is not available in all states and is subject to change at any time. Neither Haven Life nor MassMutual is responsible for the provision of the benefits and services made available under Plus Rider, which are provided by third party providers (partners). For more information about Haven Life Plus, visit: https://havenlife.com/plus.html [195659121] Read our revelations

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