Paying for insurance in tough times

Falling short every month is, unfortunately, a financial fix many households are experiencing these days. Insurance lands near the bottom of priorities, yet you know you need it. There are no easy answers, but the following tips can help.

1. Know the grace period for each policy. Some grant up to a month, but others penalize if payments are a day late. Being cancelled for late payments is not something you want on your record if you can help it, so it helps to know your parameters.

2. Ask your agent (auto and home) to help you find ways to lower the premiums. You may have to decrease coverage for a short time to see a significant difference. At the same time, get at least 2-3 different quotes for the same amount of coverage. Consider a new insurer only if the savings are substantial, especially if your current provider offers longevity discounts, a savings you can earn by remaining with a company for three or more years.

3. Carry just enough life insurance to help your heirs pay off debts and funeral expenses. A whole or universal life insurance plan may have an option for using the cash reserve to pay premiums for a time. If not, consider trimming back to term, which is the least expensive.