The biggest excuse that people have have for not buying life insurance is they say it costs too much.
Really? Too much?
A recent survey found that those that had life insurance 2/3 of them paid less than $100/month for coverage. Of those, almost half paid less than $50/month.
Did you catch that? $50/month for cheap term life insurance.
Let's get things straight: Life Insurance is NOT expensive.
In fact, unlike other types of life insurance products. term life insurance is super cheap. Stop making excuses and buy some.
Here are seven tips in helping you get the cheapest term life rate possible.
1. Don't procrastinate
Unless you're Jack Palance and doing one-arm pushups at the Oscars at the age of 70, the chances are as you get older, your health is going to decline. Surprise, surprise. Procrastinating in buying your term life insurance can have a drastic impact when you go to apply.
I know what you're thinking:
Oh, nothing will ever happen to me.
Tell that to the 37-year-old male who had no prior condition but had a heart attack at the age of 32. Luckily, he's okay, but due to complications that resulted from the heart attack, getting life insurance is not impossible, but it's super expensive. Super expensive does not equal cheap.
The longer you wait, the more expensive life insurance could be. Every year that you get older, your term life monthly premiums could go up by as much as 10%. Every year that you age is one year closer to death (fun thought right?), which means that insurance companies have to charge you more to earn their money back.
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2. Cut out the crap
If your idea of the three healthy food groups is Cheetos, hot dogs and Ben and Jerry's, then eventually you're going to pay in more ways than one.
Eating crap, aka junk food, can have drastic effects on your cholesterol, diabetes, and high blood pressure, which can crank up your insurance premiums super quickly. While these foods are delicious, are they really worth hundreds or even thousands of dollars every year? Instead of sitting down with the soda and potatoes chips, reach for the veggies and hummus.
Other crap includes smoking, chewing tobacco, and even over consumption of alcohol. Cirrhosis, anyone? One of the best ways to get cheap rates is to kick all the bad habits. If you're a smoker, cut that crap out! Kicking the habit will save you thousands of dollars every year (not to mention the money you save from not buying cigarettes).
If you're trying to get the cheapest term life rate possible, you have to cut out the crap. Harmful habits can cause your monthly premiums to go through the roof.
I had a buddy of mine who was young and in good health and applied for term life insurance. Initially, I had quoted him the best rate, preferred plus. Little did I know that he had a secret habit of chewing tobacco. His rates almost tripled because of it. Crap like tobacco can cause your rates to go down the toilet.
If you already have a life insurance policy, but you've kicked a bad habit like smoking, you can have your policy reevaluated. It's easy to have your policy reevaluated, in most cases you just have to ask your insurance agent. Depending on how long you've kicked these habits, you could receive a lower monthly rate.
3. Slow down
A good friend of mine used to drag race cars as a weekend hobby. Supposedly, that weekend hobby transferred over into wherever he drove. His lead foot resulted in several traffic violations, not only increasing his auto insurance premium, but also jacking up his life insurance premium.
You might not know it, but your driving record can affect your life insurance rates. Having several accidents or speeding tickets could jack up (pun intended) your monthly premiums. Because of all the deaths that occur due to reckless driving, line insurance agents have started looking at driving records as a part of the application process.
Sure, going 10, 20, or even 30 M.P.H. over the speed limit might save you a couple of minutes, but it could break your bank. Stop driving like Jimmie Johnson – you're not a NASCAR driver! Make sure that your term rates don't get caught speeding, too.
4. Don’t forget the family
When applying for life insurance, many people don't realize that family history comes into play, too. Even if you are super fit, but you've had a parent pass away prematurely (think before the age of 70), for a condition that could be hereditary, like heart disease in fathers for sons, or breast cancer in mothers for daughters, it could mean bad news for your insurance premiums.
If those conditions took their life, that could mean an immediate disapproval in the worst case scenario or a higher rated class in the best case scenario. Obviously, some conditions you can't control with your parents, but if they're not exercising and taking good care of themselves, you have an incentive to speak up.
If you don't know your family history, or your adopted, don't worry it isn't going to hurt you. Be honest with your agent and tell them that you don't know how healthy your family history is. So, before you start looking for cheap life insurance, call Uncle Bobby and see how his health is doing.
5. Shop independently
Back in the day, my wife used to sell insurance for a big outfit. Since I was also able to offer insurance, we did a comparison. We based it off a quote that she did for a male individual applying for term life. When we ran the quote with her company and me with my brokerage firm that can use any carrier, amazingly, it was more expensive to go directly through her, even though we were both offering the same company and the exact same products. Lesson learned: it pays to shop around.
For those of you that may not know, there are stark differences between a captive insurance agent and an independent insurance agent. Captive insurance agents usually represent one company and can only offer policies from that company. Independent agents are allowed to represent several different insurance agencies and are not tied to one specific business.
Using a captive agent could be much more expensive, even if you bundle all your policies together. Make sure to use an independent agent who can quote you among various carriers. This is even more crucial if you have some health condition that qualifies you as a high-risk individual.
Aside from being less expensive, there are several advantages to using an independent agent. One major advantage of independent agents is if/when your premiums ever go up, they can notify you and begin to search for a better policy.
6. Stop living like Sir Richard Branson
It's always fun to take a little bit of risk to get your heart rate going. A scary roller-coaster ride, skiing, tubing behind a boat are all good examples of this. Even the top life insurers don't think twice if you partake in any of these activities.
If you’re a sky-diver, space jumper, crocodile wrestler, that’s a completely different story. Just because Richard Branson likes to do crazy things doesn’t mean that you need to too, especially if you’re trying to get cheap term insurance. You don't have to quit all of your hobbies and live in a bubble. You can still continue to do the things you love, as long as your hobbies are safe.
Aside from skydiving, several hobbies can raise your premiums that you might not think about. Activities like riding a motorcycle, hunting, boating, and scuba diving can cause your monthly premiums to go up anywhere from $500 – $2,000 every year.
7. Get off your tush!
Just because you aren't wrestling crocodiles doesn't mean you should be sitting at home on the couch binge watching your favorite television show. Regular exercise can significantly reduce your chances of having healthy complications or being diagnosed with diseases. Being active and at a healthy body weight is important when shopping for a cheap life insurance policy.
The American Heart Association suggests getting at least 30 minutes of vigorous exercise every day. This exercise can be anything from lifting weights, jogging, playing tennis, or even dancing. Being active will make you healthier, feel better, and lower your monthly insurance rates. Similar to dumping bad habits, it you've lost a lot of weight and began to exercise, it's a good idea to ask your agent for a policy reevaluation to see if you're eligible for lower monthly premiums.
Some of the best life insurance companies in the United States even offer incentive programs to their customers. These programs are working to make their enrollees healthier and live longer. Each Wellness program is different, but most of them include some “point system” that reduces rates depending on how many points you accumulate. These programs typically include an activity tracker to measure the amount of exercise you do every day.
8. You can’t handle the truth
I recently took a call from a gentleman who was applying for life insurance and had recently gotten turned down by MetLife. He had used Select Quote as his insurance provider, and he had failed to disclose certain information about his past: a certain health condition. Through underwriting, the health condition was discovered, and sure enough, he was declined.
When applying for life insurance, you have to be transparent. You must share everything about your medical history, especially if it's going to come back on your records. You might not be able to handle the truth, but the insurance companies will, and will do so by denying you. Lying to the life insurance agent does nothing but slow the process down and cause you more trouble in the end. The insurance agent wants to help you get the best rates possible; they are working on your team, being 100% honest is important.
9. Only buy what you need
The goal of life insurance policies is to provide for your loved ones after you passing. Because death is a scaring topic, many consumers get worried about leaving their loved ones with thousands of dollars in debt. This fear will cause a lot of people to buy a larger policy than they need. If you're looking for a dirt-cheap life insurance policy, take some time to look at your current lifestyle, annual expenses, and any debts that you would leave behind. Debts like mortgage, student loans, and credit cards can quickly add up and leave your family saddled with debt if something tragic were to happen. After you've evaluated all those things, you can begin to decide how large of a life insurance policy you need.
Many financial experts suggest reevaluating your life insurance needs once every couple years. Because your life changes so frequently, you might find that your life insurance needs change also. Having children, paying off your house, or going back to college can drastically change your financial situation, which could impact the amount of life insurance you need. Don't get scared into paying for more insurance than you need. So don't buy a million dollar policy when you need $500k and don't buy 2 million in coverage when you only need one.
Dirt Cheap Life Insurance
Life insurance is important for any family. No family should ever have to worry about covering the final expenses of their loved ones. Life insurance will not only pay for bills if something were to happen to you, but it also gives you peace of mind knowing your family is taken care of. Getting cheap term life insurance is not difficult. Get your free quote now so you can have a policy in place as soon as possible.
Find the Best Life Insurance Rates
Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.
Term life is so inexpensive that it’s crazy to me when I learn that someone I know isn’t covered. Seriously, cut out a few Starbucks coffees a month and most policies can be paid. Thanks for the great article.
These are great tips! Life insurance coverage is so important, yet so many people do not realize that it is possible to achieve cost-effective life insurance premiums. Taking care of yourself is your best bet.
This are really nice tips. We must take care of ourselves to get cheaper but better insurance coverage. I think term insurance is one of the cheaper forms of insurance available.
These are really good tips for those who are searching for term life insurance. But I don’t feel that family history should affect the policy. My father is affected with heart disease and my mother family has diabetic problem. First one is highly risky for insurance provider. But how can I know which one will affect me. So I don’t feel it is good to take family history in consideration.
These advice is really helpful . If your going about purchasing the type of insurance that you want you must think it over. You really just need to figure out the type of coverage you need and how long you need it for.
Jeff, nice blog!!
An interesting case with you and your wife’s firm. Rates as you knoww are approved by the state DOI and should be the same regardless of agent. Nonetheless, using an independent over a captive almost always makes sense as the indy has no incentive to push an inferior product.
Ashly, rebating insurance commissions is illegal in most states …so no bargaining power.
On the last one about telling the truth, what if you die due to something you failed to disclose? Have you heard much about life insurance companies denying a payout for one reason or another?
@ Tim I have heard of a few situations where an insurance company didn’t pay but those are typically obvious cases where the client blatantly lied on the application. Sometimes it goes overlooked, but it’s a risk not worth taking.
So how do you compensate for #4? In my #LifeAware post, I detail that even though I was in the best health of my life, my family history plus a bad draw from the gene pool resulted in me paying a rather large premium per month. It sucks because I did follow all of this advice but I still got hosed.
Depending on the condition, certain life insurance carriers will not take into consideration family history. For example, some insurance carriers might automatically decline a female applying for life insurance if her mother passed away due to breast cancer, where others won’t even consider it. That’s why it’s important to work with an independent agent that’s in the know of what carriers you should be shopping your quotes with.
FYI, if you need some help getting a quote feel free to hit me up. Be glad to see what options are out there for you. 🙂
It’s worth noting that life insurance brokers usually receive the first years premiums as commission. Knowing this gives you a LOT of bargaining power and can discount your deal by a lot in the long term.
Ashley, are you saying that you can actually bargain with the life insurance agent and ask them to take less of a commission so you can lower your rates?
Great tips Jeff! I’m shopping around for term life for myself and my wife and it is amazing how much the rates vary from one carrier to the next.
“If you’re trying to get the cheapest term life rate possible, you have to cut out the crap.” – We could reduce health costs significantly if we just lived healthier.