There are various ways to lower your life insurance premiums, however in order to take advantage of them, you’ll need to do some advanced preparation. Here are seven strategies:
1. Buy term life insurance
Term life insurance is not only less expensive than whole life insurance, but much less expensive at that. You can often by an equivalent amount of term life insurance for just a small fraction of what it will cost for a whole life policy.
In addition, term life insurance can be customized to provide the greatest amount of coverage at times in life when you need it most. Once that period of high need passes, you can either lower the death benefit, or even cancel the policy entirely. You will spend no more money for term life insurance than you absolutely need to.
2. Buy now – don’t delay
Procrastination often seems as if it is a default setting in the human condition. Most of us will gladly put off till tomorrow what we can easily do today. But when it comes to life insurance, procrastination can cost you money.
You need to buy insurance when you are young and healthy. If you need life insurance, you should take a life insurance policy now because it will cost even more one or two years down the road. In addition, a delay could result in the onset of a significant negative health condition, that holds the potential for both higher premiums or even a decline in coverage.
Neal’s Notes – I’ve been taking a lot of calls from Pilgrim readers asking about getting insurance without taking a physical exam. There are some benefits to this. But if this is something you are considering I implore you to connect with me. Why? Because insurance without a physical is expensive. Depending on your situation, I’ve been able to come up with a few cool ideas to get the coverage quick (often despite health concerns) but at lower costs than typical “insurance without physical” offers.
3. Loose a few pounds
Weight is a major problem in the US. According to the Centers for Disease Control and Prevention (CDC), 35.9% of American adults are obese, and 69.2% are overweight. The insurance industry takes a dim view of excess weight, and it can result in higher premiums.
It will be to your advantage to lose some weight before applying for life insurance. The loss of 15 or 20 pounds could make a significant difference in your life insurance premiums. This is an instance where delay of a life insurance application could make a positive difference.
4. Quit smoking
Smoking is a major negative when it comes to life insurance, so much so that companies typically have a premium chart for smokers and another for non-smokers. And the rate difference can be significant.
You can lower your premiums substantially if you quit smoking. Generally speaking, an insurance company will want to know that you’ve been smoke-free for at least two years. This shouldn’t stop you from buying coverage now however (if you need it). Get some insurance in place and then replace it down the road once you’ve kicked the habit.
5. Buy a policy with a higher benefit
Life insurance is like just about anything else that you buy – the greater the quantity, the lower the per unit cost.
Generally speaking, the premium rate per thousand dollars of coverage will be higher on a $50,000 policy than it will be on a $250,000 policy. Obviously the larger policy will cost more overall, but you’ll be getting more coverage for relatively less money.
6. Bundle your life insurance with other policies
You can sometimes get lower rates on life insurance if you bundle it with other policies that you have within the same insurance company. Homeowners insurance is an example of another type of insurance that you could bundle your life insurance policy with.
That doesn’t mean that an insurance company you have other policies with will necessarily have the best price on life insurance. You may want to shop for other insurance companies that have even better prices on similar bundles.
7. Shop, shop, shop!
Too often, people have life insurance policies that they buy from a friend or family member who is in the insurance business. And typically that person has been in the business for only a few months, and may leave the business shortly after. While your attempt to help a friend or family member establish themselves in the insurance business may be noble, it’s usually not the best deal for you.
Like any other major product or service that you buy, you should always shop around to get the best rate and terms. There are literally hundreds of insurance companies offering a wide range of life insurance products, and you will need to zero in on the small number of providers that will have the best plan for you.
Make some phone calls and check the Internet to get quotes, but once you zero in on an agent or broker who you think you can work with, and who offers reasonable rates, it’s time to work on getting the best insurance deal for you.
Make sure that the agent or broker is a seasoned professional, who knows the insurance industry inside and out, and can work up the best life insurance policy for your needs and preferences.