It always seems that there are far more things to spend money on than there are dollars in the bank account, so we’re always making tough choices when it comes to prioritising expenses. In a world full of tempting offers and super sales, it’s not surprising that we often choose to consider our immediate happiness over our long term financial well-being. As a result, life insurance is often right down the bottom of the to-spend list – after all, we don’t benefit from it in our lifetime.
By Michelle Balogh, Money Maven.
A recent study by LifeInsuranceFinder.com.au found that only 11.08% of Australians would be willing to give up the weekly cost of cigarettes in order to fund a life insurance policy that would protect their families in the event of their death. Only 15.7% of Aussies were found willing to sacrifice the weekly indulgence of coffee, whilst a mere 18.34% of those surveyed would consider giving up takeout food in order to fund a life insurance policy.
‘Clearly, Australians don’t want to sacrifice the costs of their lifestyle habits to fund a life insurance policy that will secure their family’s financial future,’ says Fred Schebesta, publisher of lifeinsurancefinder.com.au. ‘However, failing to take out life insurance can leave families at risk of severe financial stress should an unexpected tragedy occur. For many, an unimaginable amount is at stake. This can range from being unable to cover living expenses to educating their children, or maintaining a roof over their loved one’s head.’
It’s important to protect the future wellbeing of those we care about, particularly when it comes to supporting children and a family. But how can we do so without having to make major sacrifices in the present? The key is striking a balance – finding ways to make life insurance an affordable addition to life so that you can rest easy. If you find the perfect balance you can have your cake and eat it too – no coffee-detoxes or takeout-purges required.
Top tips to reduce the cost of life insurance:
1. Live healthily: It might be obvious, but it is important to remember that being a non-smoker and light drinker will radically reduce the cost of your life insurance. A smoker may pay a premium rate as much as double that of a non-smoker, so it is well worth quitting when it comes to saving cash. If you already have life insurance, quitting for 12 months may make it possible to lower your premiums, so you’d be doing good for your wallet as well as your lungs. Breath easy and sleep easy with the knowledge that your loved one’s future is secure.
Body Mass Index (BMI) is also important when it comes to evaluating your level of health. Maintain a regular fitness regime to ensure that your BMI is the best it can be to save annually on your life insurance. It’s a win-win situation, you’ll be fit, fabulous and flush with cash in no time.
2. Consider a joint policy: The benefits of marriage extend beyond the bedroom and having someone to take to high school reunions – married couples can receive a premium discount of 5-10% (depending on the provider) when they take out a joint policy. Love and discounts, could you ask for more?
3. Get going now: Whilst in social situations we might tell a tall tale or two when it comes to our age it’s a little harder to lie to your life insurance provider. Every birthday you pass will trigger a higher rate, so the best approach is to apply for life insurance well before you start to feel like you need it. Buying young can also ensure your coverage in case your health takes a nasty turn later in life.
We might not like to consider our mortality, but it is also important to consider that many of us have more dependents while we are younger. A family with small children may suffer far more if a parent is lost than they would once the kids have flown the nest. It might seem cliche, but ‘better safe than sorry’ is the best approach to making choices about life insurance.