Life Insurance – It Will Cost You Less If You Buy More
Posted on December 18, 2008 - Filed Under Business | Leave a Comment
Believe it or not, there are situations where buying less life insurance coverage will cost you more in premium. At those times, increasing your coverage by as much as $30,000 will make you pay lower premiums. If you find this hard to believe hold on till I share this secret with you.
Do you know what insurers charge per $1000 of coverage? How much does your insurer charge your profile per $1000 of coverage for a given policy? This is an important question you should ask your insurance agent and for very good reason...
For a certain insurer, a profile pays $249.90 as premium for a $245,000 renewable term life insurance policy. However, the same profile pays $248.40 if the insured opts for a $270,000 coverage instead. That is $25,000 more coverage for lower premiums at the same time.
While this may seem incredible at first, a little explanation will help you understand why this is so thereby empowering you make the most informed decision in your circumstance. So here's the explanation...
Rates for given profiles are calculated in ranges. By this I mean that an insurer will have a specific rate for coverage of, say, $100,000 to $249,000. In the example I used above, the insurer charges $1.02 per $1000 of coverage for coverages between $100,000 and $249,999. However, their charges drop to $0.92 per $1000 of coverage for coverages between $250,000 and $499,999.
As a rule of thumb, if your coverage is very close to a multiple of $250,000, you'll pay less if you cross into the nearest multiple. That is, it's cheaper to buy $250,000 than $245,000, cheaper to buy $500,000 than $485,000 and so on.
You can quickly find out how true this is for your profile and preferred policy by asking for two life insurance quotes from the same quotes site. With the only difference being the coverage amount.
Get your life insurance quotes now from these highly recommended sites...
href="http://you-can-internet-marketing-tips.com/personal-insurance/Life-Insurance-Quotes/Insureme/Ezinearticles-Life/">Free Affordable Life Insurance Quotes
href="http://you-can-internet-marketing-tips.com/personal-insurance/Life-Insurance-Quotes/Hometown">Hometown Life Insurance Quotes
Chimezirim Odimba writes on life insurance.
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