We all know that life insurance is incredibly important, as it will be there to protect our family financially in the event of our death.
However, what do you do when you know that life insurance is the right thing to have, but your budget is so tight it squeaks?
First of all, there are many things that you can cut back on when times are tight, but life insurance isn’t one of them. Resist the urge to cancel your life insurance policy and instead search for other ways to cut back.
With that said, there are ways to save money on life insurance so that you can protect your family while also protecting your budget:
- Consider purchasing life insurance when you are younger. The long and the short of it is that life insurance is much, much less expensive to purchase when you are young. If you have college-aged children, encourage them to take out a quality, whole life insurance policy that can build cash value over the course of their lifetime. The super-low rates afforded to younger adults simply shouldn’t be passed up.
- Change your payment schedule. Instead of paying your life insurance in one or two payments, ask your insurer to switch you to monthly payments. This will make the process of paying your life insurance much more manageable. In addition, ask your insurer if they have automatic debit payments; this will allow your insurer to deduct your monthly insurance premium directly from your checking account.
- Consider slightly changing the terms of your life insurance policy. If you must, consider lowering your death benefits slightly. Although this should certainly be a last resort, it may be better than abandoning your life insurance policy altogether.
- Consider a term policy over a whole life policy. Although there certainly are many advantages to taking out a whole life policy, you may want to instead focus on a term policy until your financial situation improves. Term policies have much lower rates, thereby allowing many individuals, regardless of their financial situation, to carry life insurance.
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