How to Get A Cheap Life Insurance Policy in 2016
Obtaining a cheap life insurance policy can be easy to do with the proper research and knowledge.
I hope by now you realize you need to buy term life insurance.
If you have any intentions of taking care of your family and their best interests, then it should be a non-issue.
Now that we have that settled, let’s talk about how to get the cheapest term life insurance policy possible.
Let’s Start With What You Shouldn’t Do
You can make costly mistakes when buying life insurance, and that’s why this is a good place to start.
Here’s what you want to avoid:
- Shopping on life insurance comparison websites. In addition to the fact that comparison websites are confusing places to do serious business, the real purpose of the sites is to gather information – yours. The goal is to allow every insurance agent in town to get your contact information. You get few serious quotes, but a lot of inquiries asking for you to complete this and that application – so that you can actually get a quote. There may be a serious policy in there somewhere, but it will take a lot of time and effort to get there. Note: We do not do this. We not sell your information and will be only contacted by one of our internal insurance specialist.
- Using a single company agency. There are “insurance agents” who are more like employees of a single insurance company, than insurance agents in a real sense. Because they represent only one company, you will be forced into only what the company has. And that may not be the right policy for you.
- Buy through your co-worker’s cousin who just got into the business. DON’T LAUGH! Some insurance companies are revolving doors. Agents come – and go just as quickly. One of the reasons is that some agencies push hard for new agents to sell to family and friends. Once the supply of familiar contacts has been exhausted, the agent is out looking for a new career. And you don’t want to buy something as important as life insurance from a newbie anyway.
Now that we’ve got that out of the way, let’s move on to what you actually should do.
Do a Background Check – On Yourself!
On any life insurance application that you complete – other than on a guaranteed issue policy – you will be asked a large number of questions about your health, and just about everything else in your life. It’s important to answer these questions honestly, because the company will investigate all of your answers.
For example, it will do little good to not disclose a certain health condition in hopes of getting a lower premium. Once the condition is discovered, your premium rate will be adjusted accordingly.
So before applying for life insurance, be ready to give factual answers for the following categories:
- Your family history – You should be prepared to provide serious health conditions of the members of your direct family line. That can include parents, siblings, and even children, as all can indicate the presence of genetic issues. If your parents died young from health conditions then you may be in for higher rates.
- Your occupation. Some occupations are considered to be hazardous by the insurance industry. Insurance companies will charge a higher premium as a result. This is something that you will want to discuss with your insurance broker, so that you will be able to determine the best companies to apply to.
- Health conditions. Think carefully that any health conditions that you have, even if you don’t think they are serious. This can include high blood pressure, high cholesterol, or a previous bout with cancer. It’s always better to disclose these conditions, than to ignore them and hope that the insurance company won’t find out.
- Your weight. They’re going to weigh you so there’s no point in giving an optimistic number on the application.
- What you do for fun. If you have any potentially hazardous extracurricular activities, you’ll have to disclose these as well. Insurance companies do have an issue with people who are into skydiving, deep-sea diving, or flying a private plane. If you don’t disclose it, and insurance company finds out about it later, they could void your policy.
- Bad habits. This includes smoking, excessive alcohol consumption, and drug use. What you think of as only an occasional habit, can classify you as a higher risk. If you have any these habits, it may be best to drop them before applying for life insurance, if getting the lowest possible rate is your overriding concern. Otherwise disclose them to your broker so he can find the best companies to apply to.
- Your driving record. A history of traffic accidents, police citations, and especially DWI/DUI episodes will matter for insurance purposes. Information is readily available through databases, and the insurance company will check.
- Your Credit History – I know it seems crazy to think that your credit is a factor in an insurance decision, but statistics do not lie. Life insurance companies have determined that people who have better credit not only pay their premiums on time, but also take less risks and are less likely to need to make a claim on their life insurance.
Each of these will have an effect on the premium that you will be charged for your insurance policy. But it is very important to be honest up front, that way we can direct you to the insurance companies that will take the most favorable view your specific situation.
Because just about every insurance policy requires a medical exam (minus a no-exam policy) the insurance company is going to find out about your health or any pre-existing conditions that you have. Not only will lying just cause more problems and slow the whole insurance process down, but there could be some serious consequences of lying on your life insurance application.
If you are dishonest about any health conditions that you have and you’re accepted for coverage without disclosing that information and you were to pass away because of those complications, there is a chance that the insurance company could refuse to payout on the policy. Hiding the truth could cost your family thousands of dollars and leave them without the resources they thought they were going to have. If you feel your health will cause you to not pass the traditional medically underwritten life insurance policy, there are other options out there such as a guaranteed acceptance life insurance plan.
Establish Your Goals – What Do You Want Your Policy To Do For You?
This is where you determine how much insurance that you need, and for how long. This is where you match your life insurance to your actual needs, that way you don’t pay more than you need to.
Here are some common uses for life insurance:
- Paying off your mortgage. If you have 20 years remaining on your mortgage, and you owe $150,000, then a 20 year term life insurance policy for $150,000 will get the job done – assuming no other needs.
- Paying off other debt. If you have large amounts of credit, or business debts to payoff, you may want to maintain a policy large enough to do that.
- Providing for your children through adulthood. Figure out how much your spouse will need each year to care for your children without your income, then multiply that figure by the number of years remaining until your youngest child turns 18 or 21. That will also help you to determine the length of the term that you need.
- Financing your children’s college education. You may want to make an allowance to cover your children’s college education. Figure out how much that is, and you will have your insurance number.
- Allowing a business partner to buy-out your share of the business upon your death. This consideration is mainly for the self-employed, but it can be super important if you are. You can buy a term life insurance policy that will provide your business partner(s) with the capital needed to buy-out your family’s interest in the business upon your death. Your partner will get the business – and your family will get the cash. Brilliant arrangement, don’t you agree?
- Paying estate taxes on your estate. Even if you have so much money that you are self-insured, you may still want to keep a life insurance policy to pay the estate taxes. In that way, you will ensure that all of the money you have saved for your heirs will go to them, not to the tax authorities.
These are just general parameters to help you decide how much insurance that you need, and for how long. Most people need life insurance for more than one of these issues, so you have to crunch some numbers to come up with the final amount you will need. This will help you to buy only as much life insurance as you need, which will help keep the cost down.
It doesn’t take rocket science to do this, but I still see many people that fail to do these easy steps.
Can You Really Get Cheap Term Insurance Online?
The answer is “YES!”. Your local insurance agent can offer you insurance, but if they are a captive agent (think State Farm) then they can only you offer their insurance which often times won’t be the lowest cost life insurance available.
When shopping for term life insurance online, make sure you partner with an independent life insurance agent – that’s us 🙂 – that you can offer you life insurance from all the top life insurance companies. We currently work with 40+ insurance companies and are only loyalty to them is the one that offers you the cheapest term rate possible.
What’s the best thing? To get a quote does not cost you a dime. Yes, there’s nothing better than a cheap life insurance quote online because it’s free!
Okay, now how to make sure you get the most affordable life insurance policy possible…..
1. Get Your Term Policy as Soon as Possible
If procrastination is your middle name, it’s time to make a change. Don’t wait to buy your term life policy until later. The longer you wait, the more expensive it gets. If you realize it is a necessity in your life, then why not get it when you can get it the cheapest rate possible.
It’s not just your age that factors in your life insurance premiums going up, getting insurance at 40 will benefit you even better than waiting to purchase life insurance over 50. Though, the most dangerous risk is developing some sort of high risk condition – diabetes, high cholesterol, cancer, etc. Developing any of these will have a drastic increase to what you have to pay.
Think it can’t happen to you? Think again! I’ve personally witness clients that “put off” getting life insurance and it unfortunately cost them. Weight gain, hypertension, and various other medical conditions are the culprit that leads to their life insurance policy costing more than they should.
2. Watch What You Eat
When getting a term life insurance policy, how much you pay is determined on how healthy you are, so why not be fit and get the cheapest rate? Obviously there are other positive benefits of being fit other than getting affordable life insurance.
Cutting out the crap could also include consuming too much alcohol. Having a few drinks won’t increase your life insurance, but getting a DUI definitely will. I had one case where an individual applied with us with a recent DUI on their record. The price didn’t just go up a bit. It went way up by 10 times! Now that is not low cost life insurance!
Weight gain can lead to other medical conditions that all have an affect on how much you pay. If you’re currently overweight, that does not mean you should post pone getting insured. Apply now, get coverage and then if you lose weight you can always reapply and reduce your costs.
3. Don’t Smoke (or Chew)
Not too long ago, I had a client that was applying for a term life policy.
He doesn’t smoke, and as far as I knew he didn’t chew either. A week before he had his physical, he was working in his yard and decided to indulge in a cigar to celebrate when he finished.
I’m fairly certain that any other time he could have gotten away with it, but not 7 days prior!
Sure enough, the tobacco showed up in his system, and his premium went up; it went up a lot. Life insurance for smokers or tobacco users is not cheap; you can see this in another post. If you want to make sure you’re getting the cheapest term life policy possible, put out the cigarette and grab a stick of gum.
If you’re looking to get the most affordable life insurance possible, it’s time that you quit those bad habits once and for all. Smokers can expect to pay double or triple what a nonsmoker is going to pay.
4. Shop, Shop, Shop Around
When’s the last time that you went to the store and made a major purchase without double checking your price elsewhere? Heck, when was the last time you made a minor purchase without doing a quick scan of an app on your smartphone?
We’ve all done it: Big screen TVs, washers and dryers, brand-new cars. Life insurance shouldn’t be any different. Many different carriers cater to all types of different individuals. Life insurance rates are determined by weight classes, ages, and amount needed. So, making sure that you get many quotes from several different carriers will ensure that you get the cheapest term life policy.
While it’s odd to compare life insurance quotes like you would a TV, it’s just as important. Each insurance company is different and they all have different rating systems and monthly premiums. That’s why it’s vital that you get quotes from dozens of companies before you choose one. Because there are so many different insurance companies that sell policies, you could spend hours talking on the phone with different agents
Luckily, you can use our quote engine located in the sidebar of this page to make sure that you are getting the best bang for your buck. As an independent insurance agent, we have the ability to shop around for you with over 40+ insurance carriers to choose from.
5. Avoid High Risk Activities
Do you participate in any hazardous activities like racing or motor sports, hang gliding, piloting, rock climbing, scuba diving, or sky diving?
If so, you better be prepared to ante up on your life insurance premiums.
The cool thing is that you have a life insurance policy in-force, you would be covered if you jumped out of a plane and your chute didn’t open.
But if you don’t have a policy in-force and you know you’re going to be sky-diving soon and didn’t tell the life insurance company, the might have cause to not be required to pay.
Additional Ways Saving Money on Your Term Life Insurance Policy
Here are some additional tips to keep you from paying too much:
Buy while you’re healthy. Life insurance is one of those things that we often tell ourselves that we’ll buy “later”. But later can bring about the onset of health conditions that will make your policy more expensive. If you’re healthy now, then now is the time to get your life insurance.
Avoid up-sells. There are a host of policy riders that can be added on just about any life insurance policy. They have benefits, but they will raise the cost of your insurance. For that reason, you’ll want to keep them to a minimum.
Bundle – IF it will save you money. You can sometimes save money on your insurance policies by bundling them together. Just make sure that you aren’t paying too much for one type of coverage so that you can save on another. If the company that you have your auto insurance and homeowner’s insurance through also offers life insurance, you could save a huge chunk by buying it through the same company
Make sure the insurance company is reputable. You should make sure that the company is rated “A” or better through a ratings agency such as A.M. Best. It will do you little good to have the cheapest life insurance policy, if the company won’t stick around long enough to pay a claim.
How Cheap is Cheap?
Now you know how to make sure you get cheap life insurance, you’re probably wondering how much it really costs. The table below shows annual quotes for a 30 year term policy for both males and females ages 25-45. Notice how for a 35 year-old female the annual premium is only $223 per year. That’s only $18.58 per month!
|Sex||AGE||30Yr Term Life Policy||Company 1||Company 2||Company 3|
|Male||25||Face amount $250,000||Banner Life|
|Male||35||Face amount $250,000||Banner Life|
|Male||45||Face amount $250,000||Genworth Financial|
|Female||25||Face amount $250,000||SBLI|
|Female||35||Face amount $250,000||Genworth Financial|
|Female||45||Face amount $250,000||SBLI|
Please note that these rates for Preferred Plus rating class and are subject to change.
Can Seniors Get Cheap Life Insurance?
We are able to service many that need to get life insurance for seniors.
Most are fearful that the cost will be way too high and rightfully so.
If you are a senior, you have to realize that life insurance is not going to be as cheap as the 35 year-old female example above.
Also, if you’re battling certain ailments, that can factor into the cost of your life insurance possible, too.
Despite that, insurance companies are realizing that people are living much longer nowadays due to the advances in medicine, so getting approved for an affordable life policy is not out of the question. In fact, there are a lot of senior applicants that are surprised to see just how cheap their life insurance coverage can be. Sure, you aren’t going to pay the same as a 25-year-old, but your policy probably isn’t going to break your bank.
Can I Avoid the Medical Exam?
If getting your blood drawn is not your thing, then there are options to get cheap life insurance with no medical exam. Our go to carriers are Assurity and Fidelity that not only get you life insurance without a physical, but also issue the policies very fast.
The only downside in taking out a no medical term life policy is that it won’t be as cheap as your traditional underwritten term policy. You have to realize that if you’re bypassing the medical exam, the insurance company is taking on more risk and you’re going to pay for it.
When does it make sense to get a no exam term life insurance policy? Here are a few of the most common instances we see with our clients:
- Need Life Insurance Fast – Most commons reasons we see are to secure a business loan for collateral assignment or to satisfy a divorce decree.
- Absolutely Hate Needles – One client confessed to me that the sight of a needle will make her pass out. A no exam policy was definitely in her future.
- Totally Impatient – Do you hate waiting for things to get done? Traditional term insurance takes 4-6 weeks to process. Life insurance without a physical can take anywhere from 48 hours to 2 weeks tops to be put in force.
If you’re not sure if a no exam policy is right for you, contact our office and speak to one of our insurance specialists to best assist you.
The other possible situation that no-exam life insurance policies are a good option is if you absolutely CAN’T be approved for a traditional policy with a medical exam. You have to be careful though, there are a lot of people that have severe health complications, so they automatically assume that they would be declined if they applied for a life insurance policy, but in most cases, that isn’t true.
Choose the Right Insurance Broker – A Real One
Earlier I mentioned that you should avoid buying term life insurance through a single company agency. The reason is that they will sell you whatever policies that they have, which are not necessarily the best for your needs. This is just one of the reasons why you need to work with right insurance broker – an independent one.
Here are more reasons:
- We work with the best life insurance companies, such as Banner Life Insurance Company, and our focus will be on getting you the policy that works best for you.
- Different insurance companies take a different view of various health-related conditions. For example, some companies have a more favorable view of smokers. We can direct your application to the companies that will be the best fit for your profile. It’s important that you find the perfect company that is going to view your application favorably. It can make a world of difference.
- We know that cost is always a factor in the life insurance decision, so we always do our best to get you into the most cost-effective policy.
- Should a better policy come along in the future with a different company, we will help you make the change.
- Because we work with so many different companies, our knowledge of the business is better and deeper than that of single company agents.
- Because we know the business, we will handle the paperwork and all that is needed to get your policy approved – and that will free up your time for better purposes.
- It won’t cost you any more to buy insurance through us, than if you bought the policy directly from a major life insurance company.
You need life insurance – and term life insurance is by far your best option. Let me help you get the best policy, at the lowest possible premium, for your life and circumstances.
How much Life Insurance do you need?
One of the most important decisions in the life insurance purchase is how much life insurance you should buy. The size of the policy is going to have several different implications for you and your loved ones There are several different factors that you have to consider when deciding how much life insurance you’re going to buy.
The first and most obvious impact is how much you’re going to pay in monthly premiums. The larger the policy, the more that you pay every month. You have to find the balance of having enough coverage for your family, but not paying for more coverage than you need.
The next thing you need to consider is your debt. You want to make sure that your family has enough money to pay off all of the debt that you would leave behind. Before you purchase a policy, sit down and calculate all of your debt that your loved ones would be responsible for. Add up your mortgage, car payments, student loans, and other debts that could leave your family stranded under a mountain of debt if you were to pass away. Not having enough life insurance coverage is almost as bad as having no coverage at all.
Additionally, you need to consider your salary. One of the other common uses for a life insurance policy is to replace your income if you passed away. If you’re one of the main income-earners in your household, your family would experience serious financial suffering if you were to pass away tomorrow. A life insurance policy gives your loved ones the funds they need to find a permanent way to replace your income with losing their standard of living. It’s the best way to ensure that they will be covered if something tragic were to happen to you.
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