How to Increase Your Life Insurance Value

Insurance value varies depending on a number of factors. This is true for all insurance policies, including life insurance. In many cases, those factors are beyond your control. For example, you can't change your age. However, there are a number of factors that you can change. This will allow you to qualify for an insurance policy with lower rates than what you would otherwise be eligible for.  This, in turn, will allow you to get a better value for your money. This way, you will be able to save money and get better coverage in one go.

Health-Based Factors

Like other businesses, insurance companies want to generate profit first and foremost. The longer you hold a policy, the more money they earn. That is why they have a vested interest in attracting healthy policyholders - the healthier, the better. And they are more than happy to give lower rates and other incentives if you take certain measures to protect your health. This includes:

Abstaining from smoking - whether you smoke a cigarette a day or a pack a day, most insurance companies would count your smoking as a health risk. If you are able to abstain from smoking for a year, you will qualify for lower insurance rates.

Abstaining from alcohol - similar to above, except less restrictive. Having a drink every once in a while won't necessarily prevent you from getting lower rates, but a persistent pattern of frequent drinking definitely will.

Avoiding high risk occupations and hobbies - this can include everything from working as a journalist in a war zone to going rock climbing during vacation. Different insurance companies have different definitions of "risky" - what may be dangerous in the eyes of one company may be perfectly okay with another.

Making healthy lifestyle choices - this does not necessarily require you to be super-healthy all the time, but you can get some discounts simply be exercising every morning or not over-indulging in sugar-rich foods. As with above, different insurance companies have different definition of what constitutes a healthy lifestyle.

Policy-Based Factors

In addition to taking the measures outlined above, you can get a better insurance value by choosing certain types of insurance. This should not come at the expense of your needs, so consider it carefully.

Life insurance can be divided into two categories - permanent life insurance and term life insurance. Permanent life insurance will cover you until the day you die, regardless of how long this will actually take. Term life insurance will cover you for a certain pre-arranged period of time. Once that period ends, you can either renew it, get another policy or not get anything at all if so choose.

Term life insurance tends to be cheaper in terms of annual fees. It also gives you flexibility to adjust your policy over the course of your life to account for your changing financial needs. This includes:

Children - the older they are, they less likely they are to need your financial help. As they get older, they are able to save more money, which means that they won't need life insurance payments as much as they used to.

Mortgage and other debts - the older you get, the closer you get to paying your debts. Keep in mind that when you die, most of your debts pass on to your children.

That said, the flexibility term life insurance provides has its downside. Every time term life insurance ends, you will have to reapply again, which means that you will have to take a medical exam again. As you get older, the odds of you being rejected for health-related reasons increase exponentially. You can avoid this by getting term life insurance with a guaranteed renewal option, but it will cost you extra.


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