How to Get Life Insurance on the Cheap

How to Get Life Insurance on the Cheap

As a parent you may be wondering how to get life insurance?  Life insurance is mandatory for your family’s financial security. However, in today’s financial climate, it’s smart to reduce budget expenditures whenever you can. And since life insurance is something you pay for – but hope you never have to use, it makes sense to consider how much money you’re spending on it.  If you want to reduce the amount of money you spend on life insurance, consider the following points.

 

  1. Avoid purchasing a guaranteed issue life insurance policy. Guaranteed issue life insurance policies tend to be quite pricey and with good reason. Companies who sell such policies guarantee that they will issue anyone a life insurance policy, including people who suffer from physical conditions that would not typically be accepted by other  life insurance companies.  This means that you’re costs could be too high for no good reason.
  • So, if you’re in good health, it’s less expensive to find a regular life insurance policy.
  • However, a guarantee issue life insurance policy might be the wisest choice for you if you’re not in good health.
  • If you smoke, quit. Underwriters raise the price of insurance by 25%-50% for tobacco users. Even occasional smoking counts.
    • When you quit smoking and have gone 12 months without using tobacco, you can request that the insurance company remove the extra rating. Doing so will reduce your premiums.
    • Shop around. Each company underwrites health concerns differently. For example, well-controlled high blood pressure might not even warrant an extra charge with some companies, while other companies will rate up the policy.
    • When comparing rates, ensure you provide the same health information to each company so the estimates will reflect your true health condition and can be more easily compared in terms of price.

    How to Get Life Insurance – It Pays to be Skinny

    • Strive for your ideal weight. When shopping for insurance, it can save you money if you’re at an average weight for your age and sex.
    • Each insurance company will rate additional weight differently. After a certain amount of weight, extra pounds will raise the cost of your insurance.
    • If you’re overweight, ask your agent to show you the rating chart. If you’re close to a border weight between categories, you may be able to reduce your price by losing only a couple of pounds before you’re weighed by the company representative. Even a few pounds lost can pay when you’re considering how to get life insurance.

    How to Get Life Insurance – You Get What You Pay For

    Cost isn’t everything. Lower priced policies can actually become more expensive. Companies with an A.M. Best rating of A+ or better may charge more, but those extra costs pay off over the long haul. Here’s why:

      • If you go with an insurance company because it charges less and it goes out of business, then you have no insurance at all. So, even though you’ve been paying for insurance, you could actually lose your coverage and all the money you paid if you seek coverage from a risky company.  So be sure to stick with a well known company.
      • In the event that a significant amount of time has passed since you’ve purchased a policy from a company that goes out of business, your health may have changed enough to make getting another policy difficult.
      • So, the lesson here is to check out your life insurance company’s ratings in advance of purchasing your policy as one way of protecting your investment

      If you practice good health habits, shop around, and do business with a reputable life insurance company, you can secure a life insurance policy that both saves you money and provides for your family’s needs in the future. When thinking about how to get life insurance, these are some of the most common strategies that can reduce your costs when you purchase insurance.

      What Is A Family Budget and Why You Need It

      What is a Family Budget

      Just what is a family budget? A family budget is a plan that is drawn by members of a family consisting of the total income that the family gets every month and also the total expenditure that the family incurs every month. Although the people responsible for making this budget are the parents, all the other family members should be aware of what the budget entails. This is because it will affect the different aspects of their lives. For a family budget to be effective the following should be put into consideration

      The amount of income is the first thing that should be taken into consideration. This is because the amount of money to be spent is pegged on what is available for spending. The family should endeavor to always spend less money than the amount that is available to ensure that it lives within its means. If this does not happen, it will make the family live off debts which might accumulate to unmanageable levels. This will create a financial constraint in the family and is likely to destabilize the family further.

      What is a Family Budget Made Of?

      After determining the total amount of income available per month, the second step involves looking at the size of the family. The number of the family members, their age and their unique needs should be considered. This is because members who are sick and children require special food hence making the family budget go up.

      The family budget should satisfy the basic human wants and cut down on things considered as luxuries to the bare minimum. This does not mean that the luxuries should be eliminated from the budget they should not become a priority.

      The budget should cater for the education needs of the family. This should comprise of money required for tuition, books and even transport .The needs of the house should not be forgotten. In case the family has engaged the services of a house workers, their wages should be included there. Another expense includes the bills for water, gas and electricity. The amount used for the maintenance of the house should be included also. The health of the family should not be forgotten. The family might decide to take a medical cover to take care ofthe health of all the family members.

      After all the above expenses are catered for, the family budget should be drawn in such a way that it will leave some allowance for savings. The minimum amount that a family should endeavor to save should be 5% of the total income every month. This should not be taken after the expenses are deducted because in most cases the expenses will surpass the income. The savings should be put away before the other expenditures are put into consideration. This is the kitty that should be utilized in case there is an emergency.

      What is a Family Budget – Paying Down Debt

      In case there are some debts to be paid, the family should restrict such debt repayment to 15% of the total income.  Still the goal of the family should be to eliminate debt all altogether – and not get into it again.  What is a family budget – it’s the plan to put your family on the right financial path.

      Your Questions About Sample Household Budgets

      Sandra asks…

      AP Statistics Help?

      It is believed that the average amount of money spent per U.S. household per week on food is about $98 with a standard deviation of $10. A random sample of 100 households in a certain affluent community yields a mean weekly food budget of $100. We want to test the hypothesis that the mean weekly food budget for all households in this community is higher than the national average.

      a) State the hypotheses.

      b) Calculate the test statistic, Z. Explain why can you use Z as your test statistic for this problem.

      c) Calculate the P-value for the test.

      d) Based on your answer in the previous problem, what action do you take with regard to you hypothesis above.

      e) Write a sentence to state your conclusion about the mean weekly food budget.

      richmama answers:

      Hypothesis Test for mean:

      Assuming you have a large enough sample such that the central limit theorem holds, or you have a sample of any size from a normal population with known population standard deviation, then to test the null hypothesis
      H0: μ ≤ Δ or
      H0: μ ≥ Δ or
      H0: μ = Δ
      Find the test statistic z = (xbar – Δ ) / (sx / √ (n))

      where xbar is the sample average
      sx is the sample standard deviation, if you know the population standard deviation, σ , then replace sx with σ in the equation for the test statistic.
      N is the sample size

      The p-value of the test is the area under the normal curve that is in agreement with the alternate hypothesis.

      H1: μ > Δ; p-value is the area to the right of z
      H1: μ α, the significance level then we fail to reject the null hypothesis and conclude that the null is plausible. Note that we can conclude the alternate is true, but we cannot conclude the null is true, only that it is plausible.

      The hypothesis test in this question is:

      H0: μ ≤ 98 vs. H1: μ > 98

      The test statistic is:
      z = ( 100 – 98 ) / ( 10 / √ ( 100 ))
      z = 2

      we use a z statistics because of two things. With 100 samples it is plausible we have a large enough sample for the mean to be normally distributed, regardless of the underlying distribution. Second, we know the population standard deviation. The student t is used when we have normal data and have to approximate the standard deviation with the sample standard deviation. The student t distribution accounts for the error introduced by the sample standard deviation as an estimator to the population standard deviation.

      The p-value = P( Z > z )
      = P( Z > 2 )
      = 0.02275013

      Since the p-value is less than the significance level of 0.05, a very common testing level, we reject the null hypothesis and conclude the alternate hypothesis μ > 98 it true.

      Thomas asks…

      Please help with statistics?

      It is believed that the average amount of money spent per U.S household per week on food is about $98, with standard deviation $10. A random sample of 100 households in a certain affluent community yields a mean weekly food budget of $100. We want to test the hypothesis that the mean weekly food budget for all households in this community is higher than the national average.

      1. Describe a Type 1 error in the context of this problem. What is the probability of making a Type 1 error?

      2. Describe a Type 2 error in the context of this problem. Give two ways to reduce the probability of a Type 2 error.

      Any help is highly appreciated thanks!

      richmama answers:

      Set out your null and alternative hypotheses. You will need them when you put the errors into context.

      A Type I error is when you reject the null hypothesis, but the null hypothesis is true. It happens at a rate equal to alpha, or 100% – the confidence.

      A Type II error is when you fail to reject the null hypothesis, but the alternative hypothesis is true. You could reduce the likelihood by increasing sample size or reducing alpha.

      Ken asks…

      Statistics, i need answers to these questions! please asap!?

      It is believed that the average amount of money spent per u.s household per week on food is about 98$, with standard deviation 10$. A random sample of 100 households in a certain affluent community yields a mean weekly food budget of 100$. We want to test the hypothesis that the mean weekly food budget for all households in this community is higher than the national average.
      1) Perform a significance test at the .05 significance level. Follow the interface toolbox.
      2)Describe a type 1 error in the context of this problem. What it the probablity of making a type 1 error?
      3)Describe a type 2 error in the context of this problem. Give one way to reduce the probablity of a type 2 error.
      4)Describe a power in the context of this problem. Give one way to increase the probablity of power.

      richmama answers:

      Hypothesis Test for mean:

      Assuming you have a large enough sample such that the central limit theorem holds, or you have a sample of any size from a normal population with known population standard deviation, then to test the null hypothesis
      H0: μ ≤ Δ or
      H0: μ ≥ Δ or
      H0: μ = Δ
      Find the test statistic z = (xbar – Δ ) / (sx / √ (n))

      where xbar is the sample average
      sx is the sample standard deviation, if you know the population standard deviation, σ , then replace sx with σ in the equation for the test statistic.
      N is the sample size

      The p-value of the test is the area under the normal curve that is in agreement with the alternate hypothesis.

      H1: μ > Δ; p-value is the area to the right of z
      H1: μ α, then we fail to reject the null hypothesis and conclude that the null is plausible. Note that we can conclude the alternate is true, but we cannot conclude the null is true, only that it is plausible.

      The hypothesis test in this question is:

      H0: μ ≤ 98 vs. H1: μ > 98

      The test statistic is:
      z = ( 100 – 98 ) / ( 10 / √ ( 100 ))
      z = 2

      The p-value = P( Z > z )
      = P( Z > 2 )
      = 0.02275013

      Since the p-value is less than the significance level we reject the null hypothesis and conclude the alternate hypothesis μ > 98 is true.

      Let α be the significance level of the test

      consider the following table

      _ _ _ _ _ _ Reject H0 _ _ _ _ Fail to Reject H0
      H0 is true _ Type I error _ _ _ _ _ ☺ _ _ _
      H0 is false _ _ _ ☺ _ _ _ _ _ _ Type II error _

      So, a type I error is rejecting H0 when H0 is true, like sending an innocent person to prison
      a type II error is letting a guilty person go free after the trial.

      P(Type I Error) ≤ α

      P(Type II Error) = β

      We generally don’t work with Type II errors and instead talk about Power

      Power = 1 – P(Type II Error) = 1 – β

      in developing tests we try to maximize the Power and minimize α.

      A Type I error in this case is saying that the average amount spent is greater than $98 when it is truly less than 98$.

      A Type II error is saying that the average is less than $98 when the true value is greater than $98.

      Power is the probability of being correct when the null is false. Increased sample size or higher significance level are ways to increase the power.

      Carol asks…

      Costs of living?

      I’m trying to do a sample budget for when I graduate and get a job, but I’m trying to figure out what type of housing, etc. that I’ll be able to afford. What I want to find out specifically is “typical” costs for things like rent, electricity, property tax, utilities, phone, etc., and what a lot of households spend on things like these and groceries, etc. I wonder if there might be websites out there with ballpark figures on how to estimate these things.

      richmama answers:

      Http://www.bankrate.com/brm/movecalc.asp

      I think this is the best calculator.

      But, just google “cost of living calculator” and you’ll get tons.

      Powered by Yahoo! Answers

      Your Questions About How To Pay Off Debt With No Money

      Linda asks…

      I’m trying to figure out the best way to start investing money and paying off my high debt amount I have.?

      I’m 23 years old, I’m trying to gain structure in my finically life. I’m learning the younger you start investing, the better chance to the road of success you will have. My debt adds up to around 13,000 dollars. This is just credit cards, medical bills, a small loan from a relative. My debts and interest rates are as the following: 6000 credit card with no interest untill April of 08. 2200 medical no interest at all making $50 month payment. 2400 to a apartment complex for moving out early, no interest making 100 payment a month. 2200 to a relative who says to take care of other debt then I can repay them. I’m paying the minium on everything except my credit card with 6000balance. I pay the most I can each month to it. How should I go about paying these debts off? Also, i’m curious to what the best way to start investing are with minimal amount to invest? My job offers 401k and match but I don’t know what percent. Should I start with roth ira or what method? Thanks again

      richmama answers:

      Let’s break it down:

      BILLS: Start off by paying as much as you can toward the one bill that has the highest interest rate, even if you’re not presently being charged interest on it. After that bill is paid off, DO NOT reduce the amount of money you’re throwing at the bills — take that extra and put it toward the next bill. Looks like most of your bills have no interest, so pay off the one with the lowest balance first. When that bill is paid off, move on to the next bill with the lowest balance. As you pay the bills off, keep paying the same amount every month toward your bills until they’re all paid off.

      INVESTING: Find out about the 401(k) plan your job offers. Some companies match your contributions dollar-for-dollar up to a certain percent (6 percent is the highest I’ve seen) and other companies invest one dollar for every two dollars you contribute up to a certain percent, so once you figure that out set up an allotment from your pay to contribute only enough to have your company contribute the maximum. For example, if your company matches dollar-for-dollar up to 5 percent, have the company allot 5 percent of your income to the 401(k). If you have any money left over that you can invest, put it into a Roth IRA. There are advantages to both, but the biggest advantage to the 401(k) is the fact that employers match funds, so you get more bang for your buck.

      Steven asks…

      Can we pay off our debt when we have millions of illegal aliens pouring into our country with no jobs for them?

      They don’t have jobs and Americans don’t have jobs which means all of these people are going to need more entitlement programs. With companies going to other countries looking for cheaper labor. Where are we going to get the money to pay for all of these new entitlements?

      Many of these people are coming here with kids at the same time that people with kids are getting laid off. How are we going to pay this debt?

      richmama answers:

      The idea is for the illegals to become the next generation of tax payers to fund the entitlement ponzi schemes,

      Charles asks…

      How pay off all debt in 11 years with no extra $?

      There is a mortgage co. in my town that says they can show people with a mortgage and debt how to do this, how to pay off their house and debts with no additional money in 11 years. How do you think they do it?

      richmama answers:

      Go to their seminar and see. I would imagine that they want you to take out an equity loan to pay off current debt, then advise you to stop using credit. If you pay your mortgage in bi-weekly installments, you’ll pay it down a bit quicker…and of course, they didn’t say it was a 30 year mortgage to begin with. If you had a 15 year mortgage and sold in 11 when the market was high, you’d be able to pay off your mortgage AND make a profit.

      James asks…

      Creditor threatens to send my account to an Attorney to pay off debt?

      I got a letter today from Midland Credit Management, asking for a debt in the amount of $1,181.56. The Debt is from Aspire Visa, a card I used to have .. I could not pay it all off since I lost my job and i’m having trouble finding a new one. I can’t pay off this debt in this amount .. it originally was NOT over $1,000, it was $630. They added on all these late fees / interest when I could not pay over a amount of time. I tried to make small payments, but obviously they didn’t help, it just got larger and larger. The account has been in collections for a while and so, it doesn’t matter how much I pay, it’s still not enough.

      They sent me a letter saying:

      “This letter is to inform you that Midland Credit Mangement, Inc. Is Considering forwarding this account to an attorney with the intent to initate legal action to settle the debt.

      Please call our office immediately at 800-939-2353 to make arrangements to pay this debt and prevent any legal action on your account”

      What do I do?? I cannot afford this .. I have absolutely no funds, and there no point in calling telling them that because well, what are they gonna do?

      I’ve told them that I can pay it when I get a job, which I am currently looking for, but if the case goes to an attorney, what are they gonna do? even if I will have to go to court, that’s still not going to get them money .. because I don’t have it. I also have no assets, no car, no house, or anything. So what can they do?

      I’m really worried. I am still trying to find any job I can, but even if I do, it will take me a while to save up that much money.

      Thanks for your help.
      oh, and if you’re wondering, i’m posting this from my aunt’s house, I cannot even afford my own internet. LOL
      CAN they take me to court though, over this debt??

      richmama answers:

      Yes, of course they can take you to court over this.

      What does that mean? Well, it means you need to go to court and try to work out a payment plan with them. Do NOT just not show up. That is the worst thing you can do.

      You can also try to settle this out of court.

      You can also demand that they validate the debt.

      You can do many things. Research this topic and the topic of credit repair. You do have rights and it will make it a lot easier on you if you know your rights!

      Powered by Yahoo! Answers