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10 Tips for Big Savings on Life Insurance

Replacing your income if you were to pass away unexpectedly will ensure your family will be able to maintain the lifestyle you would want for them. When you consider the high cost of living in most areas today, it is obvious that life insurance should be a very important priority in your overall financial plan. If you are searching for life insurance options, you’ll find that you have many options.  Our goal is to help you navigate these options and get you the best rate on life insurance so that you are adequately covered.   Before you consider purchasing life insurance coverage, make sure you read our list of top 10 Tips for Big Savings on Life Insurance.  You could save thousands over the life of your policy.

1. Shop Around

The rates and features for life insurance products vary greatly between companies, which is why it is smart to shop around.  If you shop your coverage among the many companies out there, you will find that annual premiums can vary as much as several hundred dollars per year for essentially the same coverage.  When you consider the fact that most policies last 20 years or longer, simply shopping your coverage could save you thousands over the life of your policy.  An independent agency, like ours, offers access to multiple insurance companies and the greatest opportunity for savings.

2. Buy Coverage When You are Young and Healthy

Assuming you need coverage, buying coverage when you’re young and healthy will save you quite a bit over the long haul.  Unfortunately, many people try to buy coverage after they’ve developed a health impairment only to find that they can’t afford the higher rates or they are uninsurable.  There is no reason to put off buying coverage, especially when you consider term life insurance rates are at historical lows.

3. Consider Annual Renewable Term (ART)

Annual renewable term (ART) life insurance offers one year of protection that can be renewed annually with rates increasing slightly each year as you get older.   If you are looking for insurance for a short period of time, annual renewable term will make sense in most cases compared to purchasing a 10 year policy.  It could also be an option if you currently have budget constraints and can’t afford a 20 or 30 year policy.  You could purchase an ART policy and simply convert it to a longer duration policy when you have the funds available.

4. Pay Your Premiums in Annual Installments

You have the option to pay your premiums monthly, quarterly, semiannually or annually.  Paying your premiums by any option other than annually will almost always cost you more.  Life insurance companies will charge you for the convenience of spreading out your payments.   The monthly option will cost the most and will require that premiums are automatically taken from your bank account each month.

5. Look at a Fully Underwritten Policy First

No medical exam policies offer the convenience of minimal underwriting and a fast decision.  What’s the catch?  These policies cost much more than a fully underwritten policy.  In some cases no medical exam coverage makes sense, but you should consider a fully underwritten policy first.   The paramedical exam required with a fully underwritten policy only takes about 20 minutes and can be done in the privacy and convenience of your home.

6. Backdate Your Policy

Most insurance companies use ‘age nearest’ when determining your age.  That means once you hit your half birthday, you are considered a year older by the insurance company.  Most people don’t know this but life insurance companies will let you backdate your policy up to 6 months to lock in a lower rate.  You will have to pay premiums for those months that you did not technically have coverage, but it might be a small price to pay for the greater savings over the life of the policy.

7. Consider Your Group Policy

A group policy through your employer is almost always more expensive than buying an individual policy (especially if you are in good health), but it can be the most cost effective way to go for some people.  Since there is limited underwriting in a group policy, it could be a good alternative for people with health issues. It is important to know that group policy premiums increase every five years, coverage is not portable if you leave your job and there are usually coverage limits, so you should compare the cost of group coverage versus an individual policy before you make the decision.

8. Consider Layering Your Coverage

This strategy involves buying multiple policies for different term periods. For instance, a 40 year old male with a ‘Preferred’ health rating can buy a 30 year term policy with $1,500,000 of coverage for $2,149 per year.  Instead of purchasing one 30 year policy, he could also layer the coverage by purchasing a 15 year policy for $750,000 of coverage at a cost of $491.00 per year and a 30 year policy for $750,000 coverage at a cost of $1,121.50 per year.  This would allow for higher coverage during the first 15 years when financial obligations are most likely at their highest.  Once 15 years have passed, $750,000 of coverage would be left for another 15 years to cover any long term obligations.  In this particular case, the layering strategy would save $23,460 over the life of the coverage.  This should only be considered if you feel comfortable reducing your coverage over time.

9.Get a Rate Review on Your Existing Coverage if Your Health Improves

If your health has improved or you’ve made healthy lifestyle changes, you could qualify for lower rates on your existing coverage.  This could be the case if you’ve quit smoking, lost weight or been able to better manage an existing disease.  It might make sense to ask your insurer for a rate review or get a new policy from another company.  Your existing company will likely ask you to take another paramedical exam and they may want to review your medical records, but it could be worth it over the long haul.

10.Don’t Add Unnecessary Policy Riders

Adding policy riders are a way to enhance your coverage by offering additional features for an added cost.  Before you consider adding multiple riders to your policy, make sure that they make sense for your situation.

Save Money on Life Insurance

You can save a lot of money on life insurance if you work with an independent agency, like ours, that can shop your case to over 40 companies.  When you consider that your life insurance coverage is most likely going to last for 20 years or more, a little bit of annual savings will add up.  Let us shop your case to find you the best rates for life insurance.  If you would like a quote, feel to use our Quoting Tool to find your rate.  You can also call us at 877-205-4172 or email us at info@termlifeanswers.com for a complimentary consultation.

About Us

Term Life Answers was created with the main goal of finding consumers the best rates on life insurance.  If you are looking for the best rates for life insurance, we can help.  We shop the top life insurance carriers in the industry to match you with the company that best fits your situation and offers the best rate.  If you have any questions about your life insurance needs, life insurance products or your existing coverage, feel free to give us a call at (877) 205-4172 or email us at info@termlifeanswers.com .