Budgeting for Insurance

You have more options than you may know?

I spent my early years as an accountant and controller. My husband, Mike, will tell you that I am vigilant when it comes to managing our money and watching over the daily transactions. You may be like Mike and hate to think about every transaction. Have no fear. I have some ideas.

When I think of budgeting, I think of it like the kids bumpers at the bowling alley. Keeping my money out of the gutter and on a path to win the game overall. When you think of insurance as the bumpers that protect you from life’s challenges, then it will make sense to dig to find the money for it

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Here are a few tips to help you budget for life insurance:

1.    Determine your coverage needs: Before buying life insurance, it's crucial to determine how much coverage you need. Consider factors such as your income, outstanding debts, and dependents to determine the right coverage amount. A rule of thumb is to choose coverage that is equal to 10 to 12 times your annual income.

2.    Consider the type of policy: There are two main types of life insurance policies – term and permanent. Term life insurance provides coverage for a specific term and is less expensive than permanent life insurance. Permanent life insurance, on the other hand, offers lifelong coverage and comes with a higher premium.

3.    Seek advice from a licensed agent: Life insurance premiums vary widely. Keep in mind that the cheapest policy may not necessarily be the best option for you. Make sure to consider the coverage, the provider's reputation, and the terms and conditions before deciding.

4.    Evaluate your “Spending”: In today’s world of endless subscriptions, we can easily spend hundreds of dollars on services we don’t use. Find the money to match an affordable policy to meet your needs. Re-evaluate yearly to maximize your protection and return.

5.    Look for ways to reduce your current costs: Some insurance providers offer discounts for healthy lifestyles, such as quitting smoking, maintaining a healthy weight, and regularly exercising. Taking steps to improve your health could potentially lower your insurance premiums.

A quality licensed professional will understand these principles and help make the best of your dollars spent on insurance.