For many families, penny-pinching is reaching a new level during the financial fallout of the pandemic. According to Pew Research, one in four U.S. adults have had trouble paying their bills since the coronavirus outbreak began.

And while many people are feeling the financial pinch, families are also recognizing the need to protect their family during uncertain times. Even before the pandemic began, 36% of people said they planned to buy life insurance in the next 12 months – an all-time high.

So how do you balance the need for protection with the realities of day-to-day bills? Even if you’re watching your spending, there are affordable options for buying life insurance on a budget. These tips can help you get started.

Build your actual budget

The first step to fitting a new expense into your budget is to understand your monthly income and expenses. See what you need to cover, like housing, utility bills, and day care, and how much you need to spend every month. You’ll likely find areas where you could cut back to allocate for a monthly life insurance premium payment instead, like skipping your daily coffee or cancelling your Netflix subscription.

As you run the numbers, keep in mind that life insurance is less expensive than you may think – most people overestimate annual life insurance costs by 300%. The cost for a 30-year, $250,000 life insurance policy for a healthy 30-year-old male through Fidelity Life can be as low as $29 per month. For comparison, the average American spends nearly three times that amount on coffee (roughly $83 per month). It might be simpler than you think when you’re actually budgeting for life insurance.

Determine what type of life insurance you need

When it comes to the potential payoff, life insurance is hard to beat as a financial tool. By spending a little every month, you can provide your family with a financial payout later that’s much bigger than they could save on their own.

Term life insurance is generally the best option for budget-conscious buyers because it’s affordable and flexible. It allows you to choose a term length, typically between 10 and 30 years, and a payout is guaranteed during the term as long as you continue to make regular payments.

If you have lifelong financial needs, like providing for a child with disabilities or covering funeral costs, permanent life insurance may be the better option. Keep in mind that permanent life is more expensive than term life, though, so term life is really the way to go if you’re watching your dollars. Our agents can help you compare options to figure out the best plan for you.

Decide how much life insurance you need

More coverage means higher costs, so it’s important to right-size your plan. A huge policy with a big payout might sound nice, but it won’t help your family if you’re unable to keep up with the monthly premiums.

If you choose term life insurance, the term length will also affect the cost of your plan. In addition, life insurance riders can offer extra protection for special circumstances, but may tack on extra costs to your premium payments.

Make sure that you’re choosing a policy that not only provides ample coverage, but also makes sense for your budget right now. Keeping these factors in mind can help you avoid stress or missed payments down the road.

Finding coverage you can afford

When you’re ready to buy, there’s a nearly endless array of companies and policies to consider – so a little comparison shopping for insurance quotes can help you find the best deal for you and your family. Fidelity Life designs life insurance plans to meet the needs of everyday families, with coverage options ranging from $5,000 to $1 million. If you’re worried about your health affecting your premiums, Fidelity Life also offers affordable policies that don’t require a medical exam.

One more tip for keeping costs low: It’s always a good idea to buy sooner rather than later. Life insurance product costs go up each year as you get older, and health issues that crop up later in life can make coverage more expensive or prevent you from qualifying at all. Buying while you’re young can help you lock in more affordable rates, and your premiums are guaranteed to stay the same for the length of your policy in most cases.

Budgeting for peace of mind

Protecting your family’s financial future is more important now than ever. No matter what you decide, getting life insurance protection is an essential part of any budget – and you and your family will get peace of mind from it.

Still have questions about budgeting for life insurance?

Give our agents a call or see which plan is right for you.

At Fidelity Life, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed, and updated regularly to ensure the information is as relevant as possible.