Quotacy wants to help you save money. We pay our agents a salary, not commission, so we will never try and make you spend more than you need to. Here are 7 ways you can save money on life insurance:
1) Comparison Shop
We cannot stress enough the importance of comparison shopping the different life insurance carriers. Each carrier follows their own guidelines when determining how much coverage and at what cost an applicant should be approved for. Let’s say you have Type 2 diabetes. One carrier may offer you coverage at $30 a month because they see in your application that your condition is well-managed. Another carrier may offer you $80 a month because they see Type 2 as too big of a risk to ensure at a low rate, even if it is well-managed.
2) Consider Term Insurance
Term life insurance is much cheaper because it is simply level coverage for a certain amount of time, 10 years, 20 years, 30 years, etc. Term is not life-long coverage, unlike permanent insurance. Permanent life insurance policies have a cash value component that can be quite beneficial for many consumers, but the cash value aspects bring higher premium payments. According to the Society of Actuaries, premiums for permanent insurance can be 5 to 10 times higher than the same amount of level term life insurance.
3) Buy Life Insurance ASAP
As soon as the need for life insurance exists, buy it right away. As you age, life insurance gets more expensive. For example, if you are newly married and plan on having children, buy the insurance before you have children. For women this is extremely important because pregnancy can sometimes create issues when applying for life insurance.
4) Improve Your Health
The healthier you are, the cheaper your life insurance because, to be quite frank, there is less chance of you dying so the insurance company sees there is less chance that they would have to payout a death benefit. Whether you smoke cigarettes or not is a big factor in costs. See our Being Healthy Can Save You Money blog for a more in-depth look.
5) Avoid Guaranteed Issue Policies
Speaking of health, if you are healthy don’t buy a guaranteed issue policy. These policies require no medical exam, but have high premiums with a low death benefit payout. Many times people end up paying more in premiums than their beneficiaries actually receive from a death benefit. These policies are typically a last-resort for those who cannot get coverage anywhere else.
6) Choose Safe Hobbies
While sky-diving can be quite exhilarating, it would be best to not make it a hobby, at least if you want to buy life insurance. Risky extra-curriculars may affect your life insurance rate. Participating in “risky” activities, such as scuba-diving, is okay if it’s once every blue moon, but the insurance company may deem you “high risk” if you make a habit of it.
7) Pay Premiums Annually
As with many other service companies, if you pay the bill as an annual lump sum instead of monthly payments chances are they will give you a discount. This is the same with many life insurance carriers. For example, a healthy 30-year-old female could get a $500,000, 20-year term life insurance policy for $19/month or $209/year. Going with the annual payments saves a couple dollars each month, and while that doesn’t seem like much in the short-term those dollars do add up. If you pay annually, but die before the end of that year, the carrier will add the amount of unused premium to your beneficiaries’ death benefit payout.
Quotacy works with many of the best life insurance carriers to ensure you get the right type and amount of coverage for your individual situation at an affordable rate. Our quoting tool lets you comparison shop in privacy; we do not require any contact information until you are ready to apply. What are you waiting for? You’re not getting any younger, and the life insurance rates aren’t getting any cheaper! Unless of course you bought life insurance previously and are now healthier than you once were… in that case, run a quote with your new information and see if you can save some money. There’s no time like the present.
Photo credit to: Trading Academy