The Center for Economic Policy and Research who are one of the forefront research institutes for insurance trends recently came out with their latest report on the status of life insurance policies nationwide in the US. The report highlighted a very serious trend. Since the credit crunch and into the current recession, many families have opted to stop their life insurance premium payments. To date as many as 4.2 million people have cancelled their policies to ease their cash flow situation. The center estimates that by the end of the recession that double will at least double. Below we will list some pointers to consider if you are thinking of dropping your life insurance coverage.
In the current climate being insured with just a group policy isn’t the safest thing. There is a much higher chance of redundancies in the near future and you must be ready for it by getting yourself another independent life insurance quote from an outside provider. If you get sacked then you will also lose your life insurance. When you have lost your life insurance it becomes much harder and often times more expensive than if you were to “change” providers to and independent source before you actually lose your insurance.
Another thing that you have to be careful about is having joint life insurance policies with you and your spouse. Initially it might seem like a good idea as it is much cheaper than having 2 separate life insurance policies. This however covers the negatives that become quite apparent when you look into the details of this joint coverage. You are actually only buying one life insurance policy because there is only one death benefit that will be paid to the surviving spouse. After the surviving spouse receives the death benefit, he/she won’t be eligible for life insurance any longer because of their age. This means you are restricting yourself to only one death benefit. We recommend that spouses should each have one life insurance policy each. Ask your provider for separate life insurance quote now. This arrangement although costing more is easier to handle and does not have any negative loop-holes.
Another area that people can save on is if they have a critical illness policy that runs concurrently with their life insurance policy. Most people don’t know that they can actually make a saving if they combine both of these policies together with the same insurer. The reason for this is two fold. Firstly, critical illness policies and life insurance policies are related and as such have some overlapping coverage which is not efficient for the client. If you have both insurance policies running then it makes sense for you to talk to your insurance provider and see if they can get a quote for both life insurance and critical cover combined under the same product to save you some money. The second reason is that you get a bulk discount from many insurers too by having more insurance products with them.
It is understandable people would think of laying off their life insurance payments for other seemingly more important expenses that have to be settled. This is because of the priority of life insurance compared to their other things is unbalanced in their minds. This is however a very dire mistake. Life insurance coverage offers some of the best returns for your death benefit when compared to any normal investment. People have to really reorganize their payment priorities and start to rank life insurance payments higher. This is especially true in the current recessionary times where we are forced to cut back.
Overall, there are a few things that you can do to save on the costs of your life insurance policy however it is more important to understand and appreciate the importance of life insurance even in the times of a recession. If you have people depending on you then it would at best be irresponsible to leave the family that depends on you on the line if you should pass away. Never forget that.
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