How to Cut Your Costs

SINCE 1987, consumers have been paying more for life insurance than they had for several years. Fortunately, though, there are ways to hold down your costs.

It is wise to remember that the premium alone is not totally reliable for comparing prices. There is a better way of stating your life insurance costs. It is called the interest adjusted index, and all agents can quote it to you. This index takes into account three other variables that affect your real insurance prices. Those three are the dividends on the policy, its cash value and the interest you could have earned if you invested your money elsewhere. Ask your agent for the interest adjusted cost index of your policy and then compare it with those of policies offered by competing companies. But compare only similar policies term with term, whole life with whole life.

It pays to scout around for an insurance firm that provides special discounts. There are discounts for nonsmokers and for people who engage in regular exercise.

Little known discounts on other insurance can cut your bills. People who equip their homes with dead bolt locks, smoke detectors and fire extinguishers pay about 5% to 10% less for homeowners insurance than their less vigilant neighbors. Allstate reasons that retirees 55 and older are often at home and gives them a 10% discount on homeowners insurance. And car owners who install antitheft devices can pay 5% to 20% less for auto coverage.