$16/month for $250,000
$25/month for $500,000
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Each life insurance company weighs up your “risk factors” differently, and the riskier you are to insure, the more you’ll pay for coverage. But rates can vary wildly, so it’s worth comparing quotes from a handful of insurance companies to get the best possible rate.
These sample rates for 10 life insurance companies were provided by Policygenius. Monthly rates are based on both $250,000 and $500,000 policies – though your premium will vary depending on your age, health, coverage amount and other factors.
Life insurance is customized to the individual, so no two policies are the same. While some factors are out of your control, like your age, there are a few things you can do to lower the cost of your life insurance.
To find the most affordable policy, follow these tips.
It’s the simplest and cheapest type of life insurance. Term life provides protection for a set period of time — like 10 years, 15 years, 20 years or 30 years. In most cases, the premium stays the same for the life of the policy, so you know exactly how much you’ll pay each month.
The best term length for you covers your biggest financial obligation, like a mortgage, car loan, your kids’ college costs or the time between now and your retirement. You should only purchase as much coverage as you need. The lower the term length, the lower the premiums will be. A 5- or 10-year term are the most budget-friendly options.
You can’t negotiate your premium down, but you can get quotes from multiple life insurance companies. Each insurance company calculates risk in its own way, by weighing factors like your health, driving record and occupation differently. For example, some insurers might penalize you for having a family history of heart disease, cancer and diabetes, while others only emphasize heart conditions.
The younger and healthier you are, the cheaper your rate will be. Life insurance underwriters look at your life expectancy based on your profile right now. As we age, our health deteriorates and our likelihood of dying increases. So applying early — before health problems set in — means you’ll lock in a better rate.
Do you need other kinds of coverage? You may be able to cut the cost of your premium by bundling your life insurance with your auto, home or umbrella insurance. When you’re comparing insurers, ask about whether you can earn a discount by combining your policies.
This strategy works best if you’re purchasing or reviewing all of your insurance at the same time. That way, you’ll have leverage with companies who are competing for your business.
Sure, it’s time-consuming, but it’s worth applying for a policy that requires a medical exam. No-exam policies — like guaranteed issue and simplified issue — are convenient if you need coverage fast, but they often cost three to six times more than underwritten policies since insurance companies can’t get a complete idea of how risky you may be to insure.
Smokers have a lower life expectancy, and smoking has been proven to increase the chance of developing other health conditions, like lung cancer.
Most insurance companies classify you as a non-tobacco user if you haven’t smoked in the last one to five years. Once you’re deemed a nonsmoker, you may be eligible for preferred rates.
If you’re not interested in giving up smoking, your best bet is to apply with companies that are known to be lenient with tobacco users.
On the same note, do anything you can to improve your health. The goal is to make sure your insurer has the most positive version of your health profile. To achieve this, it’s a good idea to see your doctor before applying for life insurance. That way, it gives you a chance to take care of any underlying health issues. It also ensures that your insurance company gets your latest medical records and no surprises pop up in the medical exam.
If you can prove that you’ve made progress between your last doctor’s visit and your medical exam, that will work in your favor.
Some life insurers are even willing to offer a discount to policyholders who track their health journey with a fitbit, like John Hancock.
For the cheapest rate, stick with basic coverage and don’t dress up your policy with riders unless you really need them.
Riders are optional extras that can be added to your policy for a fee. For example, you can opt into accelerated death benefits, spousal coverage or long-term care riders. While riders add more layers of protection, they also increase premiums — sometimes drastically.
When you buy life insurance, you have the option to pay your premiums monthly, quarterly, semiannually or annually. If you can pay up front, many insurers will reward that with a discount of up to 10%.
Life insurance is priced at a cost per thousand. The rates per thousand decrease once you reach the $100,000 mark. Think of it as buying in bulk. For example, purchasing one $200,000 policy is cheaper than buying two $100,000 policies.
If you’re tossing up between two similar coverage amounts, you may be able to save money by buying more coverage.
Good drivers are usually eligible for the best rates. Depending on the provider, to be classified as a safe driver, your driving record must be free of DUIs, accidents and major traffic violations in the past three to five years.
To get cheap life insurance, pay any outstanding parking tickets and avoid speeding and reckless driving. Bonus: This will look good on your auto insurance application, too.
CEO of True Blue Life Insurance
Life insurance agents have a secret tool that we use when a client has multiple health issues. It’s called a “quick quote.” It’s a simple form that we submit to numerous carriers to do a preliminary assessment of whether the client is insurable and learn the estimated cost for the policy.
The thing is, we can do this at any time for anyone. The main reason we don’t do quick quotes is that it takes about two weeks to hear back from all the insurance companies.
If you want to ensure you get the best rate possible on your life insurance policy, ask your agent to do a quick quote to see which company bids the lowest price for your business.
I don’t smoke or drink. Is there anything else I can do to lower my rate?
Smoking raises the cost of life insurance three-fold. What also increases your rates is the medications you take. Insurance companies don’t like narcotic pain medications. I’ve seen clients get higher rates because they were prescribed pain meds after getting their wisdom teeth removed. If possible, pass on the pain pills.
Term is almost always cheaper. The reason isn’t subtle: Term offers protection for a set time, so there’s a good chance you’ll still be alive when your policy expires. That means there’s less chance of your insurer having to cough up any money.
On the other hand, whole life is a type of permanent policy. It lasts a lifetime. Everyone dies, so your insurer knows it’s going to have to pay out your death benefit at some point.
Whole life also has an investment component, where a portion of your premium is invested in the market to increase your policy’s cash value. Once you’ve accumulated enough cash value, you can borrow against your policy and pay interest to your provider. These factors increase the overall cost of whole life, too.
No. As part of the underwriting process, insurers will ask for proof of employment and income, and may look at your credit attributes to get a more comprehensive picture of your finances — but not your credit score. For example, insurers might request info about whether you’ve filed for bankruptcy in the past.
It comes down to life expectancy. Males and smokers have a higher risk of dying than their female and nonsmoking counterparts. In turn, insurers have to assume more risk — so they protect themselves, and their bottom line, by charging a higher premium.
Let’s look at the average life expectancy in the US. The average life expectancy for men born today is 76.1, while women can expect to live to an average age of 81.1, according to the CDC’s latest data from 2017. Of course, these are averages; about a quarter of 65-year-olds will live past age 90.
As for smoking, it’s proven to increase the occurrence of other health conditions, like cancer. It’s also linked to poor habits, such as an unhealthy diet or a sedentary lifestyle — all factors that can affect your life expectancy.
Ideally, your life insurance policy should be affordable and offer the coverage you need. If you’re on a budget, there are a few ways to cut down the cost of life insurance, like choosing term life over permanent policies, buying sooner rather than later and steering clear of riders that hike up the price.
When you’re hunting for cheap life insurance, compare life insurance companies and their discount programs to make sure you’re getting the most value for your money.
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