Here are 5 tips to get the cheapest term life insurance program possible. (If you’re not sure about term life insurance versus whole life or you aren’t sure how much you need…don’t worry. I’ll be writing about those topics soon…)
1. Go shopping.
This is likely the only time you’ll hear me tell you that you should go shopping. When it comes to term life insurance, it really pays to shop every few years – especially when you are younger than 50. It’s likely that you’ll be able to replace your old term coverage with better coverage for lower premiums. At least that was my experience. Why?
People keep living longer. This happens because the doctors and drug companies work miracles to expand our lifespan. So we’re all going to live much longer than we thought. That means we’re going to be around a lot longer to pay those insurance premiums, and the insurance companies know that.
It also means lots of us are going to die AFTER the policy expires. That translates into bigger profits for insurance companies. As a result, it’s cheaper for the insurance companies to provide insurance and they’ve reduced the rates to be more competitive. If you haven’t gotten a quote for life insurance in the last five years, you owe it to yourself to get a quote today. I saved a pile of dough…why shouldn’t you?
2. Don’t wait.
I know I just finished saying that I saved money as I got older, but I don’t want you to misinterpret that. If you need life insurance, you should get it now. Today. This minute. Why? One major reason.
You have no guarantee that there is a “tomorrow” with your name on it. (Read Do You Need Term Life Insurance?)
Nobody knows when their time is up. If you’ve read my story, you already know I’m a big believer in taking your responsibilities seriously. If people depend on you – like a spouse or children – take care of them. I lived through a situation where people I depended on really didn’t do what they should have. As a result, my siblings and I struggled for years.
Get insurance now if somebody relies on you. Don’t make me come over there…OK?
3. Stay healthy and ditch your Harley.
Life insurance companies may be many things…but stupid they are not. If they make you pay a lot more (or refuse to insure you completely) because of some lifestyle issue, it may be time to rethink your priorities.
I know you love that double double cheese whopper, but does your heart? If it’s time to lose 20 pounds, get on that now. You may love skydiving, but if the insurance companies won’t insure you if you do, maybe you should take up chess instead.
They’ve done all the research. They know what kills people. All you have to do is listen to them. Don’t kid yourself into thinking you’re the one who’s going to beat the odds. You might beat the odds of course…but what happens to your spouse and kids if you don’t?
4. Be honest.
If you lie about your health and hobbies on your insurance application and then die, your family isn’t going to receive the death benefit you paid for. If the insurance company proves that you completed the insurance application falsely, they’ll just refund the premium you paid to your beneficiary. That’s a bummer.
Be honest (but stop doing things that make you a bad risk for the insurance companies).
5. Don’t buy insurance from your brother-in-law or best friend.
OK…I know that if you have a life insurance agent you really trust, nothing I say is going to get you to buy term insurance from someone else. But that shouldn’t stop you from shopping around for the policy. Remember, buy term only (unless you have estate planning needs) and keep everyone honest by getting a few quotes. Then when your brother-in-law rolls out the new policy he has in mind, you’ll be even more convinced he’s trustworthy. Win-win. Get a term insurance quote now.
What money-savings tips have you come up with when it comes to getting term life insurance?
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{ 6 comments… read them below or add one }
HELLO NEIL
MY NAME IS ROSEMARY POWELL I WAS DOING SOME SEARCHES ON LIFE INSURANCE ONE FOR MYSELF AND ONE FOR MY GRANDFATHER I SEEN YOUR ARTICLES AND I SEEN HOW SOME PEOPLE COMMENT ON YOUR VIEWS AND THEY AREN’T NICE MAKES ME BELIEVE THAT THEY ARE THE SAME PEOPLE WHO WORK FOR THE COMPANIES AND ISSUE MAKE YOUR COMMENT ABOUT. I WAS WONDERING IF YOU WOULD BE KIND ENOUGH TO GIVE ME LITTLE ADVICE . I CHOOSE TO ASK YOU CAUSE I FEEL THAT WOULD BE HONEST WITH ME AND LEAD ME IN THE RIGHT DIRECTION AFTER READING UR ARTICLES AND POST I CAN SEE THAT YOU ARE A TRUTHFUL UPFRONT PERSON WITH THAT SAID I WILL LET YOU KNOW ALITTLE ABOUT MYSELF I AM A SINGLE MOTHER OF 2 CHILDREN ONE 17 AND 7.I COME FROM A POOR FAMILY BARELY MAKING IT. I AM 34 RIGHT NOW AND WHEN I GOT PREGANT VERY YOUNG I DECIDED NOT TO FOLLOW IN THE FAMILY HISTORY. I AM NOT RICH BY FAR I MAKE 65 GRAND A YEAR AND HAVE 2 KIDS ONE WILL BE GOING TO JOHN JAY COLLEGE FOR CRIMINAL LAW AND FORENSIC SCIENCE BTW I AM FROM NYC BUT TO MY FAMILY I AM LOADED AND ALWAYS LOOKING FOR A HAND OUT. I HELP MY FAMILY OUT ALOT ESPECIALLY MY MOTHER AND MY GRAND FATHER. MY GRANDFATHER JUST TURNED 78 YEARS OLD HE LIVES OFF OF HIS SS N PENSION AND I AM THE ONE THAT PAYS HIS FONE BILL GAS ELECTRIC AND THE FOOD FOR HIM AND HIS CAT EVERY WEEK.HE IS IN GREAT SHAPE AND GREAT HEALTH.BUT THE LOAD ON MY SHOULDERS TAKING CARE OF MY FAMILY MAKES MANY SLEEPLESS NIGHTS AND STRESS LIKE GOD FORBID IF SOMETHING HAPPENS TO ME WHAT WILL HAPPEN TO MY KIDS AND WHEN MY GRANDPA PASSES I WILL BE THE ONE TO PAY FOR EVERYTHING AND PICK UP THE PIECES I HAVE NO ONE TO HELP ME WITH THAT SAID WOULD YOU PLEASE GIVE ME ALITTLE ADVICE ON WHAT LIFE INSURANCE I SHOULD GET FOR MYSELF AND GRANDFATHER TO HAVE A PIECE OF MIND
I read your article on http://finance.yahoo.com/news/4-life-insurance-policies-never-180314056.html.
As to permanent life insurance, I understand your hesitation with universal life, and much of whole life, but I’ve owned a Northwestern Mutual Whole Life policy for 21 years, and truth be told, it has done better than any investments I’ve made (which could be an indication of how lousy of an investor I am, but 2008 hit my 201K real hard, as well as my E-Trade account).
LOL!
CJ – fair enough. Thanks. You are right that insurance did much better than most investments over the last 10 years. I really appreciate you pointing this out. My experience is that this is the aberration rather than the norm but it’s important to point out. Thanks!
I like the idea of shopping for the term life insurance every few year. I used to think that the best option was to stay with the same insurance company.
I have to say #5 is the most important. It’s hard to control some of the other things listed but people always think all life insurance is the same and it isn’t. Most insurance agents have very limited resources when it comes to what companies they work with. They will never tell you because they have a life insurance license that essentially allows them to work with any and ever company out there but they don’t. Then depending on how they are contracted they can become extremely limited on what they can offer. It’s one of the biggest lies in life insurance.
I think one of the most important things is to be honest like you said! I’ve heard far too many stories of families being denied payouts.
“Because ridicule is the most effective form of education”