Cost is always a factor in everything we do. That’s because you have only a limited amount of income, and you need to cover all of the expenses in your budget on whatever amount that income provides. There are large expenses, and small ones. People often try to economize by cutting small expenses in order to preserve the larger ones. Life insurance is almost certainly one of those smaller expenses. But it can pack a lot of benefit, which makes it completely unlike most other small expenses.
For that reason, you should make a little room in your budget for term life insurance. This is true even if you have a policy with your employer, as it is almost certainly insufficient for your needs. But it should be even more important if you have no life insurance at all.
If cost is a factor, please consider the following:
Term Life Insurance is MUCH Less Expensive than You Think
People often forgo life insurance, or additional life insurance, in an attempt to keep their costs under control. That certainly makes sense in regard to life insurance if you are considering purchasing a whole life insurance policy. Since whole life insurance includes an investment provision, as well as life insurance, it can be incredibly expensive.
But you can get around that high cost by purchasing term life insurance instead. Term life insurance isn’t just less expensive than whole life insurance, but much less expensive. For example, the whole life insurance policy that might cost you an annual premium of $2,000, might be just $200 or $300 for an equivalent death benefit under a term life insurance policy.
This not only makes life insurance a relatively small expense, but it makes it much easier to accommodate within your budget. You only need to do a little bit of stretching in order to make it fit in your budget. And when you consider the amount of the death benefit that will be provided to your family in the event of your death, it will represent some of the best money you ever spend.
Using Your Next Pay Raise to Purchase a Term Life Insurance Policy
One of the least painful ways to fit term life insurance into your budget is to purchase it upon receiving your annual pay increase. Even a small percentage increase in pay will probably be more than enough to purchase a fairly large term life insurance policy.
For example, let’s say you currently earn $50,000 per year. You are in line for a 2% pay increase at your next review. That will increase your annual salary to $51,000, representing an increase of $1,000 per year.
That would be an excellent time to purchase a term life insurance policy. If the policy costs say, $300, it will easily fit within your pay raise. In fact, you will still have most of your pay increase available for other purposes. That will make the purchase of a term life insurance policy fit into your budget without any additional sacrifice on your part.
Cutting a Small Expense or Two May be All that’s Needed
If you can get a term life insurance policy for $600, you can easily afford it simply by cutting $50 out of your budget each month. Put that way, term life insurance does seem ridiculously cheap. In fact, the only way to truly measure the cost of anything that you purchase is by comparing it with what you will have to give up in order to get it.
If we’re talking about cutting expenses for $50 per month, you can easily achieve that by cutting out one dinner for two per month at a moderately priced restaurant. You can also eliminate two family meals at a fast food restaurant, which probably cost about $25 each.
If you’re a smoker, and need to quit, you can easily save more than $50. If you smoke a pack of cigarettes a day, at about $6 per pack, you can save $180 per month. That will enable you to purchase the term life insurance policy, and still have $130 per month to spend on anything else you choose.
The point is, you don’t have to make any radical changes in your budget in order to afford the typical term life insurance policy. The premiums are so low that you can afford it just by trimming around the edges of your budget.
Set Premium Payments on Auto Pay and You Won’t Even Know They’re Happening
One of the most important financial “secrets” is that how you pay for something has a lot to do with your ability to afford it. If you pay for a term life insurance policy using some type of auto payment method, it can become even more affordable than you think. In fact, just about anything that you purchase using this method will be easier to afford.
You can set up an auto payment by creating automatic drafts from your bank account. You can also set up an automatic charge to a credit card. And one of the easiest ways is to set up a payroll deduction, with the premium being paid out of each paycheck that you receive.
Any of those payment methods would essentially make the premium for a term life insurance policy virtually invisible. And since the money would be taken out automatically, you will more easily adjust to life on a slightly lower cash flow.
Let Us Help You Get an Inexpensive Term Life Insurance Policy
Of course, the whole key to getting a term life insurance policy that you can easily afford is to buy one that is inexpensive from the start. That will minimize the amount that you will have to come up with out of your budget, as well as any automatic payment methods you may want to use.
Let us help you find an inexpensive term life insurance policy. We work with dozens of life insurance companies, and can help you find not only the most inexpensive policy, but also the best policy, and the one with the highest death benefit, for the premium that you will pay.