38% of People Say They Can't Afford Life Insurance. Here's How to Save on Premium Costs

Don't let money get in the way of protecting your loved ones.

Having health insurance could spare you a world of financial upheaval if you were to get hurt or fall ill and need extensive medical care. Similarly, having life insurance could spare your family a world of financial distress in the event of your untimely passing.

But in a recent survey by ConsumerAffairs, 38% of respondents say they don't have life insurance for one key reason -- they can't afford it. If that's what's been holding you back from putting a policy in place, you should know there are steps you can take to spend less on life insurance. Here are some to consider.

1. Don't overbuy insurance

A big reason so many people end up spending lots of money on life insurance is that they secure large death benefits that are beyond what their loved ones need. Now there are different formulas you can use to calculate what your policy's death benefit should look like. You may decide to replace a certain number of years of salary, or to secure a death benefit that will pay off your current debts.

But as a general rule, if you're the sole breadwinner in your household and you earn $70,000 a year, you probably don't need a $2.5 million death benefit. And if you opt for a lower death benefit -- say, $750,000 -- you should end up spending a lot less.

2. Improve your health before applying

The healthier a life insurance candidate you present yourself as when applying for a policy, the lower a premium rate you're likely to snag. That's because your insurer will be taking on less risk of having to pay out your death benefit. If you work on improving your health before applying, you might snag a lower premium cost.

What steps should you take to improve your health? Well, it depends on what it looks like at present. If you're 15 pounds overweight, shedding those pounds could result in lower premium costs (you may want to consult with a medical professional on a healthy way to go about losing weight). Quitting smoking might also result in lower premiums.

3. Opt for term life insurance over whole life

Life insurance is generally broken down into two main groups. Term life insurance covers you for a preset period of time (often, 30 years) but doesn't accumulate a cash value. Whole life insurance covers you forever, and it does accumulate a cash value you can access or borrow against down the line.

Whole life insurance generally costs a lot more than term life, so if money is an issue, you may want to stick to a term life policy. If you're in your mid-30s and you put a 30-year term policy in place, that's long enough to cover a surviving spouse until retirement age, at which point pension income or IRA distributions could kick in.

Paying for life insurance could mean having to give up another expense. But it's a move worth making to protect your loved ones. And if you play your cards right, you might end up spending less on a policy than expected.