Top 5 Tips to Find the Best Rate for a Life Insurance Policy

Top 5 Tips to Find the Best Rate for a Life Insurance Policy

Prakash Pandey

by Prakash Pandey
Contributing Writer

Updated October 12, 2020
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Top 5 Tips to Find the Best Rate for a Life Insurance Policy

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A life insurance policy is a critical aspect of your overall financial wellness. Having adequate coverage ensures that your loved ones will have financial security if anything happens to you.

However, a significant number of Americans do not purchase individual life insurance because of high premiums. A recent survey reveals that 58% of Americans ignore buying life insurance policy because they consider it too expensive for their budget.

Here are five key factors to consider that can help you find low-cost life insurance at any age.

Choose fixed term insurance over whole life insurance

The premium of a life insurance policy depends on multiple factors, most importantly, whether the policy is a fixed-term or whole life insurance. Buying a term life insurance for 30 years or 20 years is significantly cheaper than buying Whole Life Insurance. Hopefully, you will outlive the policy without exercising the benefit. Still, it's important to remember that the primary reason to have life insurance is to offer a financial safety net to your family during your prime working years, and term life insurance achieves this goal at a lower premium. Whole life insurance is more expensive because the benefit covers the policy owner's entire life.

Be careful about Riders and Processing Charges

Life insurance policies come with multiple rider options. You can lower your insurance premium by opting out of one or more riders. For instance, the "accidental death and dismemberment" rider is usually not recommended, as it only provides a benefit in a particular situation such as a car accident. It's better to put the funds associated with such a rider towards additional coverage. Another example is the long-term care insurance rider, which can often come with qualification terms that are significantly more complicated than a standalone long-term care policy.

Bulk shopping discount works in life insurance policies as well

Did you know that the premium for a $500,000 policy is likely to be cheaper than two plans of $250,000 each? The per $1,000 cost of life insurance comes down with the overall size of your coverage, so consult your insurance advisor about your policy coverage and premiums before buying the policy. Also, having the same insurer for your auto insurance, home insurance, health insurance, and life insurance will allow you to ask for discounts. So whenever you are looking for low-cost life insurance, make sure to approach your existing insurer first.

Quit smoking or drinking habits

Do you smoke or consume alcohol? These behaviors can make it more difficult to find a low-cost life insurance policy. Most insurers want to see you quit smoking for at least two years before it would favorably reduce the cost of your policy. Similarly, consuming less alcohol can also help you bring down your life insurance premium. If you are shopping for low-cost life insurance, it's worth giving these habits another thought.

Getting more fit could reduce your insurance premium

Being overweight makes you susceptible to multiple lifestyle diseases or diabetes. Most insurance companies take into account your weight or overall health for premium calculations. If you're looking for an excuse to hit the gym again, being able to find low-cost life insurance is a step in the right direction.


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