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Ways to Reduce Your Life Insurance Rates

April 20, 2012 | Comments: 0 | Views: 141

Our tough economy has caused many of us to look for ways to cut our household budgets. We may even be tempted to cancel our insurance policies to put some more money in the bank. But terminating your life insurance is never a good idea. Since you will more than likely want to repurchase life insurance in the future, you need to consider how your age, health, and lifestyle may affect your ability to obtain the best policy the next time you apply. Depending on your future situation, you may find it difficult or even impossible to get adequate coverage.

Instead of cancelling your existing insurance policy, take a closer look at how you can maintain your benefits while reducing your costs. Here are a few options to keep your life insurance coverage without breaking the bank:

*Reduce the face value: Since it may have been several years since you purchased your insurance policy, now's a good time to take an inventory of your needs. Depending on your carrier and type of policy, you may be able to decrease the face value so you can pay lower premiums.

*Reduce the premium: You may be able to reduce your premium without affecting your policy's guarantees if you have a whole life or universal life policy and have built-up its cash value. Your life insurance policy may have also come with flexible premiums, allowing you to pay less or even skip a payment.

*Replace your permanent plan: Replacing your whole life or universal insurance with a term life insurance plan may be a viable option to reduce your rates. But be careful before making any changes. It may not be in your best interest to get out of a permanent plan that you've been paying on for years.

*Reduce your term length: If you purchased a term life plan and have done well with investments to secure your financial future, you may want to assess whether you will need as much insurance beyond a certain age. The shorter the term, the less you will pay for life insurance coverage.

*Improve your health: Losing weight, which typically lowers blood pressure and cholesterol, may help you get a better rate. Quitting smoking can also lower your life insurance costs.

With regards to health concerns, if you are facing a serious health issue such as a terminal illness, your insurance policy may allow you to take advantage of an accelerated death benefit to pay for current expenses. This can be very helpful for your family to pay the mortgage and other expenses if you are unable to work.

There are many options to consider depending on your specific situation but, whatever you do, never cancel any coverage you already have based on a new quote. Your life insurance policy and associated rates are not secure until a new plan is officially in force. You should also remember that prior qualification for a certain amount of life insurance based on your age, health, and lifestyle at the time may no longer be valid for determining your future coverage and rates.

Before you make any decisions, the best thing you can do is meet with your life insurance agent to discuss all of your options. Every company, policy, and situation is different, so make sure you get all of the facts to ensure you obtain the maximum amount of coverage to protect you and your family.

Learn more about life insurance by visiting or calling 562.498.8661.

Kelly Williams is the president of Kelly Williams Insurance, a boutique, full-service insurance agency specializing in all lines of insurance including Long Beach life insurance, auto, home, life, health, and business. Kelly Williams Insurance was founded in 1895 and is based in Long Beach, California. The insurance agency also serves Orange County and Los Angeles County. Visit or call 562.498.8661 to learn more about the company's personal and business insurance products.

Source: EzineArticles
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