America will once again be festooned in red, white, and blue this 4th of July weekend, despite the difficulties and realities of a nation in quarantine. We will still celebrate the birth of our country’s independence with pride because commemorating this holiday makes us reflect on the opportunities and freedoms we have in this nation—and that is always worthy of a colorful fireworks display.
As we celebrate the incredible accomplishments of our founding fathers and the men who fought for our freedom almost 250 years ago, it inspires us to appreciate what we have—our rights, privileges, and who we love—our families. It is the people that we love that motivate us to learn more about the purchase of life insurance to protect our family’s future. Knowledge is power when it comes to learning the right and wrong ways to do it.
The fact is that men generally pay more for life insurance than women. Data collected from various insurance providers reveal a significant gender gap in which men can pay up to 38% more than women for the same life insurance plan. This is due to a variety of factors that disproportionately affect men such as higher suicide rates, a greater chance of participating in risky behavior or holding a high-risk job, and even an increased likelihood of developing health problems such as heart disease and stroke. That is why men die are more likely than women to die early. The U.S. mortality tables for 2018 show that men’s life expectancy is 76.2 years, compared to 81.2 years for women.
Although these stats don’t speak to the life span of all American men, that lack of longevity will still have an impact on the amount they will pay for their life insurance premiums. That is why getting informed and avoiding pitfalls is key in shopping for coverage. Here are some guidelines— the top six common mistakes men should avoid when preparing to buy life insurance.
Males generally tend to be greater risk-takers in many areas of life. This often finds its most obvious expression in thrill-seeking activities. While quitting your favorite hobbies may not seem ideal, it’s important to know that participating in certain activities and behaviors can have a negative impact on your coverage, possibly resulting in higher premiums.
These activities can include mountain climbing, scuba diving, extreme sports, and any other recreational activity that could result in a greater chance of injury or even death. If it is possible and you are willing, making some lifestyle changes and avoiding these kinds of activities can significantly affect how much you will pay.
The same can be said about having a dangerous occupation. Certain jobs such as logging, mining, electrical work, and construction naturally involve a greater risk of injury than others. While changing occupations is seldom simple and oftentimes not possible, keep in mind that having a dangerous occupation may affect your premiums and coverage amounts.
Lastly, this also extends to eliminating unnecessary health risks. Quitting activities such as smoking, and excessive drinking of alcohol could significantly reduce the cost of monthly premiums—not to mention improving your overall health. As you learn more about life insurance, consider if there are things you can change to increase your safety and decrease your risk of injury or death. This will likely make it easier to afford life insurance, but it will also make it more likely that you will have a longer life.
Not only is life insurance generally more expensive for men, but regardless of gender, premiums will also increase with age. It is especially important to start looking now and lock in lower rates as soon as possible, even for younger men. The younger (and healthier) you are, the better premium rates you will generally qualify for, as they can increase every year as you age. The greatest leap in average premiums occurs around the age of 50. Remember, that since life insurance coverage is affected by the fact that men tend to have shorter lifespans than women, don’t wait until you feel comfortable enough to get life insurance
It might also be in your best interest to consider buying life insurance even before getting married or having children if you plan to eventually have a family. Before that happens, you can choose to name someone else the beneficiary who will receive the life insurance payout, such as your parents or another member of your family. You can then adjust your plan and beneficiary as necessary as you experience more life changes.
When estimating how much insurance you should buy, it’s a common suggestion to start with a plan worth at least ten times your salary. But this is not the only way of determining how much coverage you should get.
There are other things to consider such as providing for your children’s college education, paying off debts or a mortgage, and how much money your loved ones would need to continue their standard of living. You want to make sure you have enough to cover all of the expenses your family will have when you are gone, especially if you have a spouse that doesn’t bring in an income.
While you might not need to get the biggest policy you qualify for, you may want to consider buying more than you think you need at a minimum. If you estimate that $500,000 is the least amount you will need, consider getting a policy worth more. In case something happens to you, it is better that your surviving family is comfortable and does not have to worry about their financial future. As you look into how much insurance you should get, you will also need to consider your options of term or whole life insurance and which would better fit your needs.
When it comes to term life insurance, a common mistake is investing in a plan that is too short. You might be thinking that you’ll start out with a shorter term and then reevaluate when that term is over, there are benefits to committing to a longer-term policy from the outset. Again, the younger you are, the lower your premiums will be. If you outlive your term and still need life insurance, you will need to renew your policy and your premium will be adjusted based on your age at renewal.
Instead of going with a 10- or 15-year plan, you may want to consider a 30-year plan as you will be paying the same premium rate for a longer period of time. You may also not have to pay much more for a longer plan. A comparison of policies for healthy males aged 30 shows that the sample premium for a 10-year $500,000 policy was $13.76, while the same plan with a 20-year term amounted to just $20.21 per month. With affordable options like these, a longer term might be the right choice for you.
It can be tempting to go with the cheapest option that you find, but cheaper premiums can lead you to opt for less coverage, so make sure you look deeply into what different companies offer. Furthermore, consider how well-established a company is as well as its reputation and ratings before buying.
You don’t have to narrow your options to only the biggest names, but a smaller company can also come with risks. Even if it has affordable plans, you want to make sure the company can deliver in the event of a claim or that the company will not dissolve before you have the chance to use your plan. To ensure you don’t find yourself in that situation, make sure to ask the right questions to the insurance companies you are considering.
Many people, men in particular, might feel that they can handle researching, evaluating, and purchasing a life insurance policy on their own. While that may be true, you don’t know what you don’t know, and a lack of knowledge could lead to expensive mistakes like the ones above. Finding an experienced life insurance agent can help you avoid these mistakes and others so that you can focus on the important things in life.
Understanding your own needs and having a critical eye when researching can help you feel more confident in the choice you make. Make it a point on this Independence Day to find freedom from the stress and uncertainty of the future with a solid life insurance plan. At LifeQuote, we provide both term and whole life insurance and will help you find a plan suited for you. Make the choice to invest in your family’s financial future and get a free quote from us today.