With the economy sagging many families are having a hard time paying for the basics, including healthy food and new clothes. And adding something like life insurance to the mix probably seems next to impossible. However, considering the importance of life insurance and how it can protect your family if you suddenly die, many people do what they can to find a policy that fits within their air-tight budget.
Here are a few little-known techniques that can help you find the best life insurance rate out there:
Go With Term Every Time
When it comes to saving money on life insurance there’s little debate that term is your best option. Many people waste time comparing and contrasting the pros and cons of whole life insurance rates vs. rates of term life insurance. That’s time you could be spending getting several term life insurance quotes and negotiating with insurers. Because term gives you exactly what you want (coverage when you die) and nothing more, it’s much cheaper than whole.
If you do want to invest sometime in the future you can always do so by investing in your company’s 401(k) or buying some bonds or ETFs. There’s no need for a whole life insurance plan to save for the future. And because term life insurance plans or significantly more straightforward than whole you’ll usually be able to compare policies much easier, helping you get a lower life insurance rate.
Become an Ideal Applicant
There are a few factors that life insurance pay attention to when figuring out your monthly payments:
- Your age
- Your gender
- Tobacco use
- Health history
This life insurance rate chart should help you see the influence that age has on your monthly payments:
Obviously, you have no control over the first two on the list (OK, you do have control over the 2nd one, but that’s another story altogether). But you can do something about the next 4.
Your occupation isn’t the easiest thing to change. And a career change doesn’t make sense to do just to save a few dollars per month in life insurance. investing in life settlements makes you follow special considerations. Since these type of policies are secondary in the market, there are number of rulings which you need to abide by. However, if you’ve been considering changing fields, a lower life insurance rate may be the straw that breaks the camel’s back. Make sure that your new job is significantly safer than your current one. If you change from an accountant to a test pilot you probably won’t be doing yourself a favor when it comes your life insurance rate.
Literally half of the six factors mentioned above are completely under your control (and are health related). Despite this, many people don’t take their health seriously and expect to pay low rates even though they’re overweight and smoke two packs of cigarettes per day. That’s simply not realistic.
But what is realistic is the fact that you can make some tweaks — or perhaps a full overhaul — to your health in a relatively short period of time. Most life insurance companies consider you a non-smoker after avoiding tobacco for a full year. So if you want to leverage your no-smoking status into lower rates, you should start sooner rather than later.
The concept of a life insurance broker has shifted in recent years. While brokers used to be the only practical way to compare life insurance rates from different insurers, the internet has changed all that. Brokers still help you compare rates like they always have, but they’re not more up-front about any commissions they receive.
In fact, many brokers now add their commission directly to your monthly payments up-front –which makes it much easier to know if you’re getting a fair shake.
And many life insurance comparison sites (like this one) receive a commission from every quote you receive –whether you decide to open a policy with them or not. In general this eliminates any conflict of interest the site may have when offering you a particular insurer’s policy.
Know Your Current Coverage
It may seem hard to believe, but many people take out a life insurance policy even when they already have one with their employer. Even if you don’t think you’re covered, double check with your employer’s HR department beforehand to make sure. While you’re playing detective you may also want to see if you have mortgage term insurance as part of your home’s mortgage. This is simple insurance that protects your family from default in case of your death (kind of like regular life insurance but it doesn’t pay for things like funeral expenses).
If you do, you may opt for less coverage as your family won’t need the money for mortgage payments. In other words, by opting for less coverage, you’ll be getting lower life insurance rate quotes when you’re ready to “shop”.