If you’ve done a bit of research online about how to save money on life insurance, we’re sure you’ve already read several articles telling you that you can save a ton of money by:
- Buying life insurance while your young.
- Quitting smoking.
- Losing weight.
- Buying term life insurance vs whole life insurance.
- ETC…
Which is all…
Fine and dandy, but telling someone who is older that they should have bought their life insurance when they were younger isn’t much help. And telling someone to quit smoking and apply for insurance in a year from now isn’t such great advice if they get run over by a bus tomorrow!
And while…
Losing weight can often help someone qualify for a better life insurance rate, let’s face it, losing weight is tough! And even if a potential applicant is committed to the idea, it’s not like they’re going to lose a significant amount of weight in a week or two so this option will still postpone applying for a life insurance policy. And postponing is never a good idea especially if they don’t have any life insurance in place currently.
Which just leaves us with…
The advice that you should buy term and invest the difference.
“But is that really good advice?”
Is saving money by purchasing one type of life insurance policy over another type always the best idea?
Well…
In our opinion here at I&E, that all really depends on your specific situation. This is why we decided to write a different kind of article about…
“how to save money on life insurance”
An article that focuses more on how to get the most “bang for your buck” rather than simply looking for the most affordable option out there. Because after all, sometimes the “cheapest” isn’t always the “best”.
You see…
Lots of times, when an individual decides to purchase a life insurance policy, the first thing that they want to know is:
How much it’s going to cost?
And…
Is the insurance company reputable?
Which makes sense… Right?
This is also why a lot of folks will often apply with the highest rated life insurance company, offering the lowest price for the insurance they are looking for.
The problem is…
Few individuals will take the next step and ask…
“Why does this insurance policy cost less than the others?”
For example…
If one was to walk into an electronics store and go shopping for a TV, the first thing that they would probably do is decide what “size” of TV that they were looking for.
From there, they would probably narrow down their search to 2 or 3 different “name brands” that they were comfortable with (such as Samsung, Sony, Visio, etc..) and then see which one offered the lowest price.
But here’s the difference Between buying a TV and buying life insurance.
If one TV was $100 dollars less than all the rest, most folks would wonder why? Most folks would ask questions like:
Does this TV have:
- The same resolution as all the others?
- Is it a smart TV?
- How many USB ports does it have?
- Is it a newer model or older model?
- How much does it weigh?
- Does it come with a warranty?
- ETC…
Ironically though…
When most folks purchase life insurance, they don’t ask these kinds of questions. They just “assume” that all life insurance policies of a particular type are the same. And usually they just decide to apply for coverage with the company that is offering the “best” price.
This is why…
Here at I&E, in addition to providing our clients with the rates of several different insurance companies during the decision-making process, we also like to compare how each insurance policy differs from one another.
And…
It is here that we’re often able to help folks save a lot of money because, while they end up spending more on a particular policy, paying more for the policy that they choose could end up saving them money in the “long run” by not needing to purchase any other “types” of insurance.
You see…
While most folks are able to understand that if they die, their death could have significant financial consequences to their loved ones. Far fewer individuals take the next step and apply this logic to what would happen if they became seriously sick or injured and didn’t die.
Sure…
When you die, you’re not going to be able to work any longer, but what happens if you become sick or injured and aren’t able to work? Wouldn’t all of the same horrible financial consequences that would occur to your family if you died happen if you couldn’t work anymore?
“Probably”
This is why…
In addition to purchasing life insurance, many individuals will purchase Disability insurance and/or Critical care insurance as well.
But what if…
You were able to combine these needs with a life insurance policy so that you could potentially save quite a bit of money by not having to purchase three different types of insurance policies.
In cases like these…
It might seem like you’re actually paying more for your insurance than you would otherwise be paying, only now instead of just purchasing a life insurance policy based on the death benefit that it provides, you’re also purchasing a life insurance policy that offers a lot of additional benefits.
As a result…
You may not need to run out and purchase a separate disability insurance policy or a separate critical care insurance policy which in turn could easily translate into you saving money each and every month.
The one main downside…
To this approach however, brings us back to the problem with the advice that we so often frequently hear from other insurance brokerages and financial advisors which is to:
“Always purchase term life insurance vs whole life insurance”
The reason why…
This is a problem is because if you do decide to purchase a term life insurance policy combined with a critical care or disability rider, it’s important to understand that those additional insurance protections will disappear at the end of your term life insurance policy just like the death benefit will.
Which means that…
Just when your need for critical care protection is growing, your insurance will likely be ending. Not a good place to find oneself.
This is why…
Automatically assuming that purchasing a Term Life Insurance Policy vs a Whole Life Insurance policy is always going to be someone’s “best” option could potentially be a very costly mistake and is why we here at I&E like to provide our clients with a wide variety of options when considering which “kind” of life insurance is going to be the “best” for a client.
It’s also why we…
Like to remind folks to ask the same question that we mentioned before which is…
“Why does this insurance policy cost less than the others?”
Or more specifically…
Why does term life insurance cost so much less than whole life insurance?”
Now…
In order for us to be able to answer that question adequately, we’d have to dive into a whole different topic, one which we have discussed considerably in the following articles: Is Whole Life Insurance a Rip-off? And Why Does Whole Life Insurance Cost So Much?
But…
For those just looking for the “cliff notes version” all we would say is that whole life insurance costs a lot more because there’s a really good chance that you’ll actually receive a death benefit from it as opposed to purchasing a term life insurance policy which you’ll likely out live. That and, whole life insurance policies offer a wide range of financial tools and opportunities which simply aren’t available while owning a term life insurance policy.
The good news is that…
Here at I&E, our goal isn’t to try and “sell” you on any one type of life insurance product. This is why we have worked very hard to develop relationships with dozens of different life insurance companies so that when it comes time to helping our clients determine what “kind” of life insurance policy is going to be the “best” for them, we don’t have to implement a…
“One size fits all strategy”
Instead, all we need to do is listen to what our client is trying to achieve by purchasing his or her insurance and then provide him or her with some great options. From there, it’s simply a matter of then trying to determine “which” insurance company is likely going to be the “best” fit.
So, what are you waiting for? Give us a call today and see what we can do for you!
