It’s critical to obtain life insurance if you have people in your life that rely on you financially. What if, on the other hand, you’re having difficulty fitting those premium payments into your budget?
Living costs are increasing across the board these days. Even if your premium is the same as it has always been, you may be nearing the end of your financial resources. You have options if this is the case. Here are three that you should have a look at.
1. Make the transition from whole life to term life.
The sort of life insurance you have could mean the difference between paying more or cheaper monthly rates. If you now have a whole life policy that you can’t afford, you may want to consider switching to term life.
Whole life insurance can provide coverage for the remainder of your life. Furthermore, your insurance policy can build up a cash value that you can access or borrow against (doing so diminishes the death benefit on your policy, but it’s an alternative).
On the other hand, whole life insurance can be expensive, costing significantly more than term life insurance. Term life insurance covers you for a set amount of time and does not build up a cash value like whole life insurance. However, it is far less expensive, so you may have an easier time paying for it. You’re also better off with term life insurance than with a whole life policy that lapses because you can’t afford it.
2. Cut your death benefit in half
You might desire to leave a sizable death benefit to your loved ones. However, if the larger benefit is prohibitively expensive, you may want to consider reducing your coverage.
Assume you have a $1.5 million life insurance policy. That’s a great gift to give your loved ones, but if it’s out of your budget, you can consider downgrading to a $1 million death benefit or even a smaller amount.
3. Reconsider the length of your insurance policy.
Suppose you’ve purchased a 30-year term life insurance policy. But later on, you discover you won’t need coverage for that long, so reducing your coverage window could save you money.
Imagine you were in your 30s when you purchased a 30-year term life insurance policy with the primary objective of protecting your children. Because your children will likely be able to work in their 20s, a 20-year term life policy may be sufficient for your needs.
Don’t just throw away your life insurance policy.
You may be tempted to cancel your life insurance if paying for it has become more difficult due to increased expenditures or other circumstances. But, before you do, remember why you bought the policy in the first place: to safeguard the people you care about.
As a result, it’s worth doing everything you can to avoid going without life insurance. You may need to reconsider your coverage level or the type of life insurance you have, but having some coverage is preferable to having none at all.
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