Life Insurance Hacks: Basic Tips to Get the Cheapest Premium

Getting Life Insurance can be expensive. An insurance premium can often cost you more than what you can get for term life insurance, and it could prove to be pretty bothersome at times. However, it doesn’t have to be. There are ways for you to get the most out of an insurance deal, and you won’t need to be buying expensive premiums just to get a good deal.

Here are some tips for you to get the best Life Insurance available:

Considering Term Life Insurance Policies

As the name implies, Term Insurance policies provide protection for a specific period of time and generally pay a benefit only if the insured passes away during the “term.” Term periods typically range from one year to 30 years, with 20 years being the most common term.

One of the biggest advantages of term insurance is its lower initial cost in comparison to permanent insurance. Term Insurance is generally cheaper because you’re generally just paying for the death benefit – the lump sum payment the beneficiaries may receive upon the death of the insured, provided that it happened within term of the policy. As with most permanent policies, your premiums help fund the death benefit and can accumulate cash value.

couple discussing insurance

Term insurance is often a good choice for people in their family-formation years, especially if they’re on a tight budget, because it allows them to buy high levels of coverage when the need for protection is often greatest. Term insurance is also a good option for covering needs that may disappear in time. For instance, if paying for college is a major financial concern but you’re pretty sure that you won’t need life insurance coverage after the kids graduate, then it might make more sense to buy a term policy during your children’s college years.

Also, you can always just renew your Term Insurance if – which is the best case scenario – nothing bad happens to you during the “term”.

Get More than One Quote

The two most basic keys to getting cheap Life Insurance is to focus on getting a Term Life Insurance policy, and to get quotes from multiple providers. So, shop around!

Life Insurance is basically a purchase. Just like most purchasing decisions, finding many options can give you an edge. Most people don’t bother obtaining multiple quotes because it’s time-consuming. It could be an arduous task, but surely it would be better to spend more time before closing a Life Insurance deal than to regret your impulsive choices.

With today’s technology, there are now ways to go about the time-consuming aspect of finding multiple quotes for your Life Insurance policy. For example, using an online life insurance quote tool is the quickest way to get quotes from several reputable insurers at one time.

Avoid Riders and Additional Insurance

Riders are the supplementary benefits added in the primary life insurance policy purchased by the insured. These are the additional covers offered to the insured with the main policy so that the insured can get additional benefits under the single plan. Although they are nifty by nature, these riders entail additional costs to the insured in the form of increased premiums.

happy family

If your goal is to find the cheapest insurance possible, the best course of action is for you to say no to any add-on insurance or policy riders. Examples of these add-ons include the option to purchase child policies or more insurance at a future date without going through the medical exam process again.

Then again, there are “good” riders that can be beneficial in the end. Riders can be purchased to accelerate your death benefit and pay you out for medical expenses if you have a terminal illness but haven’t passed away yet. Term conversion is another rider that allows you the option of converting your Term policy to a Permanent (whole life) policy.

By the end of the day, you have to choose your coverage wisely. If you need coverage for your kids, then it’s totally fine to pay for the extra fee – but make sure that you actually “need” these coverage. Also, if you’re someone who is on the fence between term and whole life coverage, the Term Conversion Rider can give you that option for a few additional dollars per month.

Check your Lifestyle

For most Life Insurance Policies which are taken out over an agreed period or term, your premiums are based on a number of factors. When you apply for Life Insurance, your insurance company assesses certain criteria and details about you and your lifestyle in order to determine the cost of your premiums, and whether or not they would accept your application based on what you tell them.

insurance agent

This is one of the few insurance products that have the price tailored specifically to you, and your provider takes into consideration some or all of the following:

  • Age: Here’s a general Life Insurance rule of thumb: The younger you are, the better health you’re likely to be in, so getting a life insurance early on can mean lower premiums. Put simply, the younger you are when applying for insurance, the cheaper it could be.
  • Health and weight: If you are classed as overweight or obese based on a height-to-weight ratio measurement, you may pay more for your policy. This is because your insurance company could assume that if you are overweight, you are more likely to suffer from weight-related health problems.
  • Medical history: Most life insurance policies are medically underwritten, thus, you have to provide information about your immediate relatives’ medical history. Your insurance company, however, do pay particular attention to your medical history. Also, watch other small details – cholesterol levels can affect your rates, as insurers often give relatively more expensive premiums to those with already high cholesterol levels.
  • Occupation: Some professions carry a greater risk because of their day-to-day duties, so you might find that this impacts the cost of your insurance. A fireman, for example, is likely to pay higher premiums than an office worker.
  • Lifestyle: You can be asked to provide details of any habits or hobbies that play a regular role in your life. Frequent smoking and drinking are likely to increase your insurance rates because of the toll they can take on your health. Certain high risk pastimes could also affect your premiums, including sky diving, mountaineering, and motor sports, among other extreme sports.

Get in on a Group Policy or Bundle your Policy

Most of the corporate benefit programs nowadays offer Life Insurance that doesn’t require a physical exam or for you to undergo any medical tests. While the amount you can take out is often limited, it is a way to get some coverage if you feel that you are currently unfit or fear that you are unable to afford the premium by yourself. Becoming a member of an association or organization can often get access to a group life insurance policy in many cases.

more happy family

Also, another way to receive discounts on your quoted life insurance rate is to bundle coverage with your car, home, or other insurance. Large-scale insurers now have features that can be fairly cheap in the long run because they give you the most options to bundle. A good strategy to maximize your bundled discounts is to review all of your insurance at the same time and pick the company that can give you the best deal for switching.

Getting life insurance doesn’t need to be a tall order for anyone. If you follow these tips, surely you can reduce your life insurance premium costs and live a more comfortable and secured life.