9 ways to save money on life insurance


Chris Walters

Chris Walters

Blog author Chris Walters

Chris Walters writes for Policygenius, a digital insurance brokerage trying to make sense of insurance for consumers. He previously wrote for The Consumerist.

Published January 30, 2015 | 4 min read

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Featured Image 9 ways to save money on life insurance

Updated Feb. 12, 2018: The great thing about shopping online is that it's fast, convenient and private. The drawback is sometimes you find yourself shopping for a product you don't know much about. For most people, life insurance fits that description. The truth is it's not hard to buy a good, yet affordable life insurance policy, so long as you know what to look for. Here are nine ways to save money on life insurance.

1. Opt for term, not permanent insurance.

Why: OK, there are a few times permanent life insurance is called for, most notably if you have a complex estate or special needs dependents. But most people just need a plain vanilla term policy, which has a hard expiration date, no cash value component and, as such, is significantly less expensive. If an agent pushes you to consider a permanent policy, get a second opinion from a qualified financial planner. We've got a crib sheet to figuring out if you need term or whole life insurance here.

2. Buy sooner rather than later

Why: The cost of life insurance goes up with age, and the number of insurers willing to work with you might shrink depending on your health history. So if you need life insurance, now's the time to buy.

3. Work with an agent who can pull quotes from multiple insurers

Why: It'll save you time — you won't have to request quote after quote from individual insurance companies. (You can quickly compare life insurance quotes across insurers here.) Plus, an experienced agent or broker can identify which insurers are more amendable to shoppers will your health history and profile (more on this in a sec).

4. Don't waste time shopping across brokers

Why: Put simply, brokers and agents can’t discount rates, whether online or face to face. Life insurance prices are regulated, so the rate an independent broker shows you for MetLife is the same rate you’ll be shown anywhere, including if you went directly to MetLife. If you find a broker you like, stick with him or her. Otherwise, comparison-shopping across brokers will do little more than waste your time.

5. Disclose all health issues up front

Why: By being transparent about your health history, you'll get the most accurate quotes and save yourself a surprise down the road. Even if you don’t think the issue is important — like slightly high blood pressure that doesn't require medication, or sleep apnea — it's likely to be discovered in the underwriting process and might affect your premium. There's another good reason to disclose everything up front. If you do, your agent can match you to the most competitive insurer. Some insurers, for example, are more accommodating than others for people with diabetes, or who have a family history of cancer.

6. Quit smoking

Why: It will save you a lot of money. Seriously: A recent Policygenius study of the healthiest states found smoking has the highest impact on life insurance premiums (342% increase). If you get life insurance while you're a smoker and at some point quit smoking, you can request a requalification for nonsmoker rates after you’ve been tobacco-free for at least 12 months. You’ll have to do the medical exam again, but it will probably save you a lot of money. Speaking of which ...

7. Take the medical exam

Why: Sounds like a hassle, we know, but, (a) the paramedical exam isn't that bad and (b) opting for a non-medical exam is going to cost you. Insurers have to account for the added risk of not having a comprehensive snapshot of your health, so premiums for these policies are generally higher right out of the gate — even if you're not in perfect health. You're better off taking the exam, improving your health and then re-testing a year after the policy has been in effect to see if your insurer will lower your premiums. (Many will if your test results show significantly improvements.)

8. Pay annually

Why: We know, easier said than done. However, if you can swing a year's worth of payments, you'll save money, because insurers add on extra fees when the premium is paid month-to-month. Some company discounts for paying annually are as high as 8%, which can add up.

9. Look for a guaranteed level term premium

Why: That's a fancy way of saying the premiums paid for the policy won't increase during the term. It's more expensive to buy life insurance when you're older, so by buying young and getting a guaranteed level term life insurance, you'll be able to average in the cost of those later years immediately. This will protect you from having to deal with higher premiums later on.

If you're not sure how much coverage to buy, the easiest way to find out is to use our free insurance checkup tool. We look at your current financial and family situation and your plans down the road and figure out the optimal amount of insurance to buy. Plus, we don't do cold-calls or share your name with anyone, so you can use the results however you like.

Have more life insurance questions? We've got all the answers and then some (for real) in our Life Insurance Learn Center!

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