Reconsideration and reapplication

How to lower your premiums on an active life insurance policy

Logan Sachon

Logan Sachon

Published October 11, 2018

Sometimes when you apply for life insurance, your offer comes back higher than you expected — usually because of something that came to light during your medical exam or medical records check, like a medication you forgot to disclose, higher cholesterol than you thought, or a higher weight than initially listed on your application.

This offer is called a modified offer.

If you’re unhappy with the premiums in your modified offer, the best course of action is usually to accept the offer so that you have coverage (sometimes you can lower the premium by reducing your coverage or term, see below).

Then, in a year or two, you’ll have two options to lower your rates: reapplication or reconsideration.

Reapplication is simply applying for new policies.

Reconsideration, also called rate reduction or re-rating, is when you ask your life insurance carrier to look at updated medical records and medical exam results to lower your rate. Some carriers offer this option on a case-by-case basis after you’ve had an active policy with them for a year or two.

Read more:

How to lower your life insurance premium at time of offer

Reconsideration is something you can talk to your life insurance carrier about once you have an active policy with them. Many people try to ask for reconsideration at the time of offer, but the carrier’s offer is based on an underwriter’s careful review of your medical records and the results of your medical exam — there’s no room for negotiation.

There are other ways to lower your premiums before you sign, however:

1. You can lower the face value of the policy

If your applied for a $500,000 policy and your premiums come back too high, talk to your agent about lowering the death benefit in order to lower your premiums.

2. You can lower the policy term length

If you’re purchasing a term life policy instead of a whole life policy, adjusting the term is one way to lower the premium cost. Adjusting a 30-year term insurance policy to a 20-year term insurance policy could significantly reduce your premium rates. Again, your agent can help you find the right term.

3. You can opt to pay your premiums annually

By paying your life insurance premiums annually instead of monthly, you can sometimes save between 2% and 8%.

Whatever you decide, some coverage is better than no coverage, so the most important thing is to find a sweet spot with the most coverage and longest term possible at a premium you can afford. Your insurance agent can help you find a policy value and term that makes the most sense for you.

Once you finalize your policy and have life insurance, you can work to improve your health and ask for reconsideration or reapply for a new policy after one to two years.


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How to apply for reconsideration

The reconsideration process varies by carrier and is at the discretion of each underwriter. But there are a few things that are consistent across carriers that do reconsideration:

1. Show a year of progress

To consider you for any kind of rate reconsideration, the carrier will want to see at least one year of progressively good health records from the time your policy is in force.

If, for example, you had a higher offer because of high blood pressure, the carrier would not only want a new medical exam that showed lower blood pressure, but they’d also want to look at your medical records for the past year and see several doctors’ visits with lowered blood pressure. Same with weight: they’d want to see not only that you lost weight after the policy was in force but that you had kept it off.

2. Take another medical exam

In addition to pulling more medical records, your carrier will also want you to take another medical exam. Some carriers will pay for the medical exam if you’d like your rate to be reconsidered, but some will charge you for the medical exam (you are never charged for the life insurance medical exam during your initial application). When you ask about reconsideration, ask about costs as well.

3. Get your reconsideration rates — or not

After you take a new medical exam and the carrier looks at your medical records, they may come back with a new health rating and offer or they may not. Again, this process is totally up to the carrier and is very much done on a case-by-case basis.

If your carrier declines to re-rate your policy, you’re still covered by them at the same rates that you were paying before. They won’t increase your rates or cancel your policy. But if you still want to lower your rates, you can always apply to other carriers to see if your new health profile brings back any lower rates (see below).

How get lower life insurance rates

Life insurance rates generally go up as we age, but there are a few factors that could mean you could be eligible for lower rates in the future:

1. Improve your health

The most common reasons that your quoted rates could go down versus up include cholesterol, blood pressure and build/weight, which can all be lowered by lifestyle change.

2. Quit smoking

Quitting smoking, or getting further away from your last cigarette, could also lower your rates. Generally, carriers will offer you non-smoker or non-nicotine rates after you’re five years away from your last cigarette (though for some carriers, it could be as little as one year out). So if you are four years out when you first purchase your policy, many carriers will give you smoker rates. But after you have your policy for a year and have passed the five-year anniversary of your last cigarette, you can ask for reconsideration for non-smoker rates. Read more about life insurance and smoking.

3. Allow more time to pass after a medical event without recurrence

It’s also possible that reconsideration or reapplication could result in lower rates simply from the passage of time. Similar to how you need to be five years away from your last cigarette to be considered a non-smoker, the insurance company wants to see several years without recurrence after some medical events in order to give you better rates. For instance, if you had cancer that went into remission with treatment, the more time that has passed without having a recurrence, the lower your rates will be. Your agent can give you an idea on the number of years you may need to wait depending on your condition.

If you think you’re paying too much for life insurance, a Policygenius agent can help you find a new policy you can afford. Start by getting quotes now.