Save Money on Life Insurance: 7 Tips to Save Big

Save Money On Life Insurance

Everyone wants to save money on life insurance and sometimes people even ask us if we can do better. The answer is we wish it was free so everybody can have it, but life insurance premiums are fixed by the law. So whether you go to direct to the company or use an agent, you are getting an exact same rate. For those who are really interested in saving money on life insurance, there are some small adjustments that can turn into a large saving for you and your family over the years. Life insurance should break your budget, if you follow these 7 tips you will be making some big savings. The following are some key points from this article;

  1. You don’t have to visit a billion of websites to be able to get some accurate quotes, you can just go to the bottom of this page and fill out our quote engine and compare the offers you are getting from different top A rated companies. This is the best way to save money because all life insurance companies offer different rates for the same product and coverage amount. 
  2. The second thing you should consider doing when looking for some deals is considered buying a term life insurance policy. If you didn’t know term life insurance is the most affordable type of life insurance on the market and is actually the easiest life insurance to buy and get coverage for.
  3. Life Insurance carriers use your actual age or age nearest to determine your rate. Most companies determine your age by the age your nearest to. For example, if you are 53 and 1/2 or higher,  you will get hit at the age of 54, which will lead to a higher rate. So to save money on life insurance we can pay prior premiums to “save age” till we get passed the halfway point.
  4. When getting your life insurance policy the company will give you an option to pay monthly, quarterly, semi-annually and annually. You get discounts on your premium starting with quarterly to annual payment frequency.
  5. To get the best rates most companies require a medical exam which includes the nurse coming out to your home to check all your vitals. 
  6. One of the best things about life insurance companies is that they like to forgive and forget. What I mean by this is that a company will re-evaluate your application if you decide to go healthy. For example, if you are a smoker you already know that you will be paying twice as much for life insurance coverage due to your habit but if you decided to quit smoking for more than two years after you bought your policy you can qualify for non-smoker rates which can lower your premiums drastically. 
  7. The best way to get a huge discount, in the long run, is to purchase life insurance now, at this very moment. It is highly likely that you will never be as young as you are today, right now!

First, let’s cover how rates are determined briefly. Life insurance companies base your rates on your age, payment frequency, and your health class. This leads us to 3 areas we can use to get some extra cash in our pocket.

Tip #1: Shop around for quotes

As an independent life insurance brokerage we will always recommend for our clients to utilize our free services but if you are a DIY kind of person then the world to you! We still want to help out our DIY-ers! The best thing for you to do as a consumer is shop around for quotes. You don’t have to visit a billion of websites to be able to get some accurate quotes, you can just go to the bottom of this page and fill out our quote engine and compare the offers you are getting from different top A rated companies. This is the best way to save money because all life insurance companies offer different rates for the same product and coverage amount. This, of course, can take some time and if you change your mind about doing it all by yourself then you should consider working with an independent agency who respresents at least 30 companies. Here at InsureChance, we work with over 60 top rated companies and can do all the hard work and do all the comparing for you!

If you have health complications then you should definitely consider working with an independent life insurance agency because with a health condition it will be slightly harder to get the best deal possible. For example, if you have diabetes you should be buying coverage from a company like Prudential who specializes in diabetes. Doing so will mean you are getting fair rates because they understand your condition but if you apply to a company that specializes in sleep apnea you will find yourself getting rated up because diabetes is not their specialty, sleep apnea is. Every life insurance company has their own niche and that’s why we recommend you to work with an agent because they will have your best interest in heart and want you to get approved not denied and definitely want you to get the lowest premium with the highest face value possible.

Tip #2: Buy a Term life insurance policy

The second thing you should consider doing when looking for some deals is considered buying a term life insurance policy. If you didn’t know term life insurance is the most affordable type of life insurance on the market and is actually the easiest life insurance to buy and get coverage for. Term life insurance is a form of temporary life insurance that provides you with coverage for a short and specified period of time and that time period depends on the life insurance company you decide to work with. Most life insurance companies offer 10, 15, 20, or 30-year term periods. The shorter the term, the lower your monthly premium will be because the life insurance company is taking a lower risk of you dying in that short time frame. If you are as healthy as they come and don’t smoke and are looking for a $500,000 term life face amount for 10-uears you are looking at premiums as low as $24.21 or 20-years for as low as $38.80. If term life insurance doesn’t fancy you because you think that you might want more coverage down the line of for a longer period of time, but you can stack up policies. If you layer your policies you can get one term life policy for your 10-year mortgage and then get a separate policy for your kids until they graduate college.

Tip #3: Save Age to Save Dollars

Life Insurance carriers use your actual age or age nearest to determine your rate. Most companies determine your age by the age your nearest to. For example, if you are 53 and 1/2 or higher,  you will get hit at the age of 54, which will lead to a higher rate. So to save money on life insurance we can pay prior premiums to “save age” till we get passed the halfway point. See example below:

Fred is looking for a $250,000 20 year term life insurance to cover his mortgage in a case of death, so his wife can have a paid off home. He is a healthy non-smoker male with a DOB of 03/01/1960 which makes him 53 but since we are looking at quotes in 09/01/2013, the companies will rate him to age nearest of 54.

Fred’s Life Insurance Quotes

Age 54 rate is $72.21

Saving money on life insurance
Age 53 rate is $65.90

This is a saving of $75.72 per year which we can
achieve by paying back premium prior to the 6-month point, in this case, it would be one payment of $65.90 in addition to your first premium.

(annual savings x 20 years -back payment=savings)

So over 20 years, Fred will save $1448.50.

Tip#4: Pay Annually        

When getting your life insurance policy the company will give you an option to pay monthly, quarterly, semi-annually and annually. You get discounts on your premium starting with quarterly to annual payment frequency. Annual payments are the best option since that is where our clients get the most savings. Let’s use our example, Fred, below:

Fred’s rates based on payment frequency with a $250,000 20 year term:

Monthly-$65.90
Annually-$757.50

Let’s take a closer look if we pay monthly after a year $65.90×12=$790.80 total vs $754.50 if we paid up front.

Annual Savings of $36.30 and Total Savings of $726 over the 20-year term.

Tip#5: Ace the Medical Exam

To get the best rates most companies require a medical exam which includes the nurse coming out to your home to check all your vitals. In the exam, she will check your height/weight, draw blood, take a urine sample and check blood pressure. These are all the factors that can make a healthy person get rates that of an ill one. Companies will look at your build and all the other factors such as, but not limited to cholesterol, blood pressure, sugar levels and more. So here are some tips Fred can take to make sure he gets favorable lab results:

  • Eat clean couple days prior to your exam such as lean proteins, vegetables and lots of water. We are not dietitians here so we assume you know the difference between donuts and broccoli(we love donuts…)
  • Stay away from alcohol, strenuous exercise, and high cholesterol foods.
  • Schedule your exam in the morning because the 7-9 hour fast while you are asleep will help you get optimal levels. Avoid caffeine and tobacco on the day of your exam. Also drink lots of water prior to your the exam an hour before will do as this dilates your blood vessels and ensures favorable results.

If Fred followed all of the above steps he ensures getting a preferred rate opposed to a standard plus rate which he could have got for any elevated levels. Let see the difference this can make:

20-year term $250,000 life insurance rates based on health class.
Standard Rate Class Annual Premium-$1002.50
Preferred Rate Class Annual Premium-$757.50

Annual Savings of $245 and total savings over 20 years are $4900. I betcha Fred is glad he said no to that donut.

Even though rates are fixed by law let’s tally up our total savings from our cash saving arsenal of tips.

Fred got a  total of 1448.5 by saving age
Also additional $726 by paying annually
Plus a whopping $4900 by getting a preferred rating based on his medical exam results.

This is a grand total of $7074.50 that Fred can now use for his family’s other needs.

Tip #6: Get healthy

You can’t sit there and pretend no one has ever told you to get healthy because I know people have told me the same! It’s easier said than done huh? One of the best things about life insurance companies is that they like to forgive and forget. What I mean by this is that a company will re-evaluate your application if you decide to go healthy. For example, if you are a smoker you already know that you will be paying twice as much for life insurance coverage due to your habit but if you decided to quit smoking for more than two years after you bought your policy you can qualify for non-smoker rates which can lower your premiums drastically. For instance, Stacy bought a 20-year term life insurance policy with a face value of $500,000 and she pays $109.86 a month and he decided to quit smoking, a year later she got a quote for $38.80 a month as a non-smoker. This is a pretty huge difference just by quitting your smoking habit.

Another big factor is your build or height to weight ratio. This is very important for life insurance companies to look at when it comes to giving out their rating. If you are slightly overweight you won’t be able to get the preferred plus health rating. Rather than waiting until you knock the weight off, you will be better off getting some sort of coverage and start leading a healthier lifestyle. If you manage to lose weight and keep it off for 12 months you can qualify for better rates! If you need an excuse to be healthy, let getting cheap life insurance rates be the reason!

Tip #7: Buy Now!!

The best way to get a huge discount, in the long run, is to purchase life insurance now, at this very moment. It is highly likely that you will never be as young as you are today, right now! So getting life insurance coverage now will mean lower rates. Bad health will always come with age and that’s why we say to get life insurance right now because you are literally in the best health you will ever be. You never know what can happen tomorrow because as you know, life is a gamble. You already know this but it’s one of my favorite things to tell our clients, sadly, we are not like good wine that gets better as it ages, so with that being said don’t put off life insurance any longer!

Work with us!

At InsureChance we go the extra mile to make sure you are getting the most value for your premium dollar, so call us at 888-492-1967 if you would like to some save money on life insurance or Compare Quotes Online. For more ways to get the lowest rate read this article!

Term Life Insurance Quotes
About Mack Dudayev

Mack is owner and life insurance expert at InsureChance. On a mission to create a way everyone can understand, afford and attain the right life insurance coverage to protect their financial responsibilities.

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3 Comments

cecilaburks@googlemail.com'

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March 31, 2014 at 7:30 am
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