How to Maximize Your Life Insurance Policy

Life insurance gives you peace of mind since it can provide for the financial needs of your dependents after your death. The mature policy can also support a charity or fund a scholarship account at your alma mater. Maximize your life insurance policy when you take several steps.
  1. Choose a Term Policy

    Whole life policies build cash value, and you can use the money for future living expenses or as investments. However, you'll pay higher premiums for this type of policy.

    If you're on a budget, choose a term policy. It usually costs less and is a way to care for your dependents while sticking to your budget.

  2. Buy Young

    As you age, your health declines and your chances of dying increase. Your life insurance premiums increase, too.

    Purchase life insurance when you're young and healthy. This way, you have enough coverage to meet your dependents' needs. Additionally, if you purchase a whole life policy, you maximize the cash value you receive from your policy in the future and increase the value of your life insurance coverage.

  3. Reduce Coverage

    Professional financial advisors recommend you purchase a life insurance policy that includes a death benefit that's equal to 10 times your annual salary. However, life insurance costs more as you increase the death benefit.

    Carefully consider how much coverage you really need. If you don't have kids or debt, you may be better off with a lower death benefit. You should also run the numbers and compare the cost of policies with different death benefit amounts as you choose a policy you can afford. As your income increases, purchase another policy or invest the difference as you care for your family into the future.

  4. Skip the Joint Policy

    You and your spouse may decide to buy a joint life insurance policy. In many cases, you'll receive only one pay out.

    Purchase two policies to ensure your beneficiaries receive the death benefit when both you and your spouse die. Separate policies also allow you to customize the coverage and account for income differences.

  5. Stop Smoking

    Smoking increases your life insurance premiums because it decreases your overall health and life expectancy.
Get more life insurance when you stop smoking. Talk to your health insurance provider about smoking cessation programs or tips. When you're tobacco-free for 12 months, ask your life insurance policy to re-classify you as a non-smoker. You'll enjoy lower premiums and may be able to pick up additional coverage for your dependents.

Life insurance is a wise investment. To maximize your coverage, follow these five tips. You'll also want to talk to your agent today as you purchase the policy you need.
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