One of the most reasonably-priced ways to protect the future of your family is with term life insurance. Although already a good value, there are ways to make sure that you are not over-paying for or purchasing too much coverage. The tips below will help you to protect your loved ones while saving money and increasing the purchasing power of your dollar.

  1. Don’t delay the purchase – the younger your age when the policy is written, the lower your premium will be.

If you decide to skip life insurance, you are gambling with your future. As unlikely as it may be that you will die before retirement, you need to plan for the possibility. Younger people pay lower premiums because the risk is lower. Purchasing a policy now will give you security at a lower annual cost.

Let’s look at an example. A delay of only a few years in purchasing a $250,000 Term 10 life insurance policy can increase your annual premium significantly.

A non-smoking male*:

  • At age 35 could obtain coverage as low $195 annually, or $1,950 over the ten-year term.
  • At age 40 could obtain coverage as low as $263 annually, or $2,630 over the ten-year term.
  • At age 45 could obtain coverage as low as $373 annually, or $3,730 over the ten-year term.
  • A non-smoking female*:
  • At age 35 could obtain coverage as low $165 annually, or $1,650 over the ten-year term.
  • At age 40 could obtain coverage as low as $210 annually, or $2,100 over the ten-year term.
  • At age 45 could obtain coverage as low as $270 annually, or $2,700 over the ten-year term.

* Figures reflect quotes obtained online (for premiums paid annually) in February 2006 for a Term 10 policy, a popular option in Canada.

  1. When is your birthday?

You may be six months away from that next milestone, but most life insurers would round up to the next birthday. Your rate quote will be based upon your age at the closest birthday, and half the time that makes you “older.” This practice, termed “Age Nearest,” can make a significant difference in what you pay. Look at these examples:

A non-smoking male*:

  • At age 39 could obtain coverage as low $248 annually, or $2,480 over the ten-year term.
  • At age 40 that coverage can be as low as $263 annually, or $2,630 over the ten-year term.
  • The difference is $150
  • At age 44 could obtain coverage as low $345annually, or $3,450 over the ten-year term.
  • At age 45 that coverage can be as low as $373 annually, or $3,730 over the ten-year term.
  • The difference is $280
  • A non-smoking female*:
  • At age 39 could obtain coverage as low $200 annually, or $2,000 over the ten-year term.
  • At age 40 that coverage can be as low as $210 annually, or $2,100 over the ten-year term.
  • The difference is $100
  • At age 44 could obtain coverage as low as $255 annually, or $2,550 over the ten-year term.
  • At age 45 that coverage can be as low as $270 annually, or $2,700 over the ten-year term.
  • The difference is $150

* Figures reflect quotes obtained online (for premiums paid annually) in January 2006.

  1. Do you smoke? Find out if the company will help you quit.

Not all insurers have programs to reward smokers who quit, but you should ask. Those that do may offer reduced premiums as an incentive to purchase life insurance and quit smoking. One company actually provides a refund of the extra premium you paid as a smoker (over the non-smoker rate) once you have quit. This company will also adjust your annual premium rate back to what it would have been for a non-smoker at the age you bought the policy.

  1. Explore options for payments.

You may be eligible for a discount of up to 10% for paying the annual premium as a single payment each year. See how this can provide savings:

  • At age 35, a man with coverage of $250,000 might spend $215 over a year in monthly payments. That same policy is only $195 in a single payment – a savings of $20 every year!
  • At age 40, a man with coverage of $250,000 might spend $288 over a year in monthly payments. That same policy is only $263 in a single payment – a savings of $25 every year!
  • At age 45, a man with coverage of $250,000 might spend $407 over a year in monthly payments. That same policy is only $373 in a single payment – a savings of $34 every year!

Control the cost of your life insurance:

Apply these strategies to make Term Life insurance an affordable protection for your family. Now is the time to invest in your future.

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