Life Insurance: The Benefits of Getting One

Life Insurance: The Benefits of Getting One
Written by Irina Vasilescu

“As certain as death and taxes” is an expression that highlights the sureness of death and having to pay your dues. Just like all the other uncertainties in life, you will never know when something unfortunate might happen so you need to prepare for such eventualities.

As morbid as it may seem, this is where plans like life insurance proves to be handy. With a life insurance plan, you can rest assured that those you will leave behind in the event of your death will have the financial protection they need.

In the next sections, we will take a look at the basics of what life insurance is, whether you need one or not, and how you can save money on life insurance premiums.

Do I Really Need Life Insurance? The Benefits of Getting One

First, how can you determine if you need a life insurance plan? And what are the benefits of getting one if you figure out that it will do you a world of good to have one?

Simply put, a life insurance policy is a contract between an individual and an insurance company. The insurer pays a certain premium as monthly payments while the plan is still active; and the insurance provider will give what is usually a lump-sum payment or a death benefit to the beneficiaries of the insurer.

Depending on your individual needs and financial circumstances, there are different kinds of life insurance plans that you can sign up for, including the following:

Term Life Insurance

One of the most common types of life insurance plans is term life insurance. For this, a specific period of time is set for the effectiveness of the plan.

For instance, you can sign up for a life insurance plan with a time frame of 10 or 20 years. Once the effective period expires, you do have the option to sign up for continued coverage, although the premiums could be a bit higher.

However, as compared to the other types of life insurance plans, this is probably the cheapest.

Universal Life Insurance

This is a type of life insurance which provides lifetime coverage. Unlike term life insurance which has a lifespan of only one or two decades, universal life insurance is more flexible. It has a tax-deferred savings component which benefits you in such a way that you can use it to build wealth over time. Another difference that universal life insurance has over term life insurance is the higher premiums involved.

Whole Life Insurance

You can also sign up for whole life insurance which, as the name implies, offers a whole lifetime of financial coverage. As compared to term life insurance, while life insurance has a higher coverage. It can also be used to accumulate savings which are tax-deferred and if you have a lot of people depending on you for financial support, this helps preserve the wealth that you plan to transfer to them in the event of your death.

After learning about the different types of life insurance, let us determine whether it is something that you need to invest in or not. Basically, life insurance offers your lenders that assurance that your debts will be paid off in the event of your death. This includes your mortgage, credit card bills, etc.

If you’re a dad who has a non-working spouse and three kids, you should definitely get life insurance. If you’re a single woman who has an ailing, elderly parent who relies on you for financial support, you might also want to invest in life insurance. But if you’re single with nobody who is financially dependent on you, getting a life insurance plan might not be worth it at all.

If you do decide that life insurance is something that you need to invest on, make sure to check on what’s included with your employee benefits. Most companies provide generous financial death-in-service benefits – anywhere from three to seven times your annual salary. If you are under the company’s employment in the event of your death and the benefits are quite generous, there is no need for you to pay for a separate life insurance plan.

How to Save Money on Life Insurance Premiums

Next, how can you save money on life insurance premiums? It all depends on the type of insurance plan that you will be investing on. Before signing up for one, make sure that you are aware of what the Terms and Conditions are. There are pros and cons to getting term life, whole or universal life insurance. Again, it pays to check on what your employer has to offer in terms of death benefits before signing up for a plan.

Check out the individual ways by which you can save money on life insurance plans, no matter which type you end up signing up for:

Do your research about the insurance provider that you will be signing up with.

If you have kids who are under 18, a life insurance plan is one of the most crucial investments that you should have. At the same time, you’d want to sign up with a financially sound company that will give those who you will possibly leave behind the financial benefits that they deserve. So how can you ensure this? Do your research.

There are dozens of companies offering life insurance plans, so rank them according to real user reviews and ratings. There are also independent agencies which rate the cost, comprehensiveness, features and reliability of the providers offering life insurance plans. Narrow down your list to two or three, and make a final choice from there.

Make a comparison of the rates, and the pros and cons of each kind of plan.

When you go online, there are life insurance premium calculators that you can use to compare the cost of the different types of plans available.

If you want term life insurance, for example, would company A, B or C give you the lowest premiums? You can also ask an agent or a broker to give you an estimate of the premium amount that you are expected to pay. Just make sure that you will not work with agents who charge a commission, otherwise you might be tempted to sign up for a plan with a higher premium than what you actually need. Take full charge of your own health.

Consider the possibility of getting group life insurance.

If a life insurance plan is not part of your benefits an employee, you can still ask your Human Resource manager if you can make your own contributions for a policy. Most providers offer group discounts for different types of insurance policy, and this is something that is definitely worth looking into. You can even enjoy the convenience of having the premium amount deducted from your monthly salary, a benefit which you can enjoy along with the discount.

Know which age to get life insurance.

When asking about life insurance, the provider will usually base your premium on your age. If you’re 53 years old, for example, and you are about to celebrate your next birthday in three months, the provider will charge you for premiums qualified for a 54-year-old person. By paying back premiums for the past six months, you can save a significant amount of money for your annual life insurance premiums.

Don’t buy more than what you actually need.

There is no exact science to determining how much life insurance you actually need. It all depends on what you’d like to leave behind in the event of your death. Do you want your kids and spouse to not have any financial problems after you leave this Earth? Or do you simply want your relatives to have enough funds to pay for your funeral?

You should also consider the Social Security survivor benefits that your immediate family will get. After making a few quick calculations, consider the work-related policies and the Social Security benefits that you will get so that you can cover the remaining amount with life insurance premiums.

Review your life insurance policy annually.

Just like all your other insurance plans, you will save a lot of money by reviewing your life insurance policy annually. The only exception is when you go for a 10- or 20-year term life insurance. There are plenty of other insurance providers out there so you can easily make the switch, but you still need to check on the benefits that you will receive and the premium amount that you would have to pay.

Other tips to save on life insurance.

When buying a life insurance plan, stay away from agents who earn on a commission basis because they will always tempt you to buy more than what you actually need.

It’s also a good idea to live a healthier lifestyle while shopping for a life insurance plan because it will significantly lower your premiums. Quitting smoking and drinking, losing weight, eating right and exercising are the things that you can do in order to lower your life insurance premium rates.

Nobody wants to face the reality of eventual death but it is something that you need to be financially prepared for. By knowing how to save money on life insurance plans, you can rest assured that those who you will eventually leave behind will not run into any problems.

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.


  • Thank you for this informative post. I have actually been researching life insurance policies recently. It is time for me to finally get a policy. There are some types I was confused on but you cleared most of it up.

  • I never realized the importance of having life insurance until my daughter was born. I really sat down and thought about what would happen if something were to happen to me or my fiance or god forbid both of us? It is so important to me that my daughter be taken care of that my family can’t wait anymore. We’ve been comparing policies for weeks. So thanks for the extra insight.

  • My mother had a universal policy for my sister, but when she went to claim it, they gave her a song and dance claiming that was not the type of policy she bought. Be sure to review all of your documents and keep them easily accessible for an emergency. The post did not talk about the bills that develop when one dies, but my mother had to pay taxes on my sister’s car, her large personal belongings, pay fees to the county and state to record the death. And that is in addition to the funeral. It costs as much to die, as to live.

  • Yeah I have to second Rhoda. Be sure to read all the fine print and know what you’re buying. Sometimes you might be buying a burial policy and not know how long you have to pay into for the policy to cover the funeral.

    Other than that, the main gripe is whether to buy term or whole life. This is my rule of thumb. If you have discipline buy term and save the rest. If you have a problem with saving, buy some sort of whole life policy then. Simple right?

  • A quick aside is to try and get assessed before you get to a point that you have lots of health concerns. Your premiums could end up ballooning pretty quickly if you start shopping for life insurance once you have some semi-serious medical conditions. The unfortunate reality for a lot of people is that they won’t consider life insurance until they’ve had a “wake-up call”; after which of course you can kiss those low premiums goodbye.

  • I would recommend going through the small print with a fine toothed comb too. It’s well worth it, just to make sure that your loved ones have as little hassle as possible after you’ve gone. Also make sure that your premiums are affordable – if you have to stop paying at any point, you won’t get you r money back.

  • Taking a policy early in your career saves a lot on monthly premiums. Avoiding an agent too resonates well with me. I’d rather go to an insurance firm’s website and study all their insurance plans for individuals. Compare the plans of various reputed firms to select an affordable and relatively cheap plan among all.

    Based on your country of your residence, you may get a substantial income tax deduction if you subscribe to a life insurance policy. It’s important to study all these aspects before taking a plan.

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