3 Ways to Save on Life Insurance
There is a saying amongst insurance salespeople, “life insurance is sold, not purchased”. I don’t believe anyone wakes up in the morning and decides to go shopping for life insurance. It is a purchase that is “event driven”. Usually the result of attending a funeral, hearing about someone who has died and was not insured or maybe even a TV commercial. Something or someone gets you thinking about life insurance. Like any other product or service, most of us are looking for ways to spend less and get more.
The following are some examples that I would like to share:
Buy Term Insurance
Term life insurance is much cheaper than any other except for accidental death insurance. Term insurance is just how it sounds; it is for a specific period of time, usually 10, 20 or 30 years. It is a very good vehicle for covering the amount of insurance needed when you are younger and have accumulated a good amount of debt.
Ask about Price Breaks or Bands
When buying term insurance; make certain to ask the agent about price breaks or milestone discounts. With many companies, the rate per $1,000 of coverage is adjusted down at certain levels of limits. For example, your cost per $1,000 of insurance may be cheaper at $250,000 than $225,000 or $500,000 than $450,000. Inquiring about price breaks could save you quite a bit of money just by asking for some additional face amount.
Online Comparison Shopping
Online comparison shopping is by far the most effective way of getting the lowest rate on term insurance. There are many life insurance companies, agencies and wholesalers that utilize comparative raters to determine pricing for multiple companies that can be sorted from low to high. Most of the systems are available online for the consumer to access. Simply entering a search for “term insurance rater” will bring up several selections for comparison raters. They act pretty much the same since the platforms are similar.
The consumer enters their age or date of birth, state of residence, class (smoker, non-smoker, preferred, etc), face amount and length of term. Most of the raters will also allow you to select the rating of the carrier. Once you have answered the required questions press enter or something like “compare now” and a list of companies will open with the monthly rates listed from low to high. It is just so easy! speaking with an agent. I will always recommend speaking with an agent so that any concerns or questions can be discussed before the purchase.
Underwriters today are asking if you use any tobacco or nicotine products, not just cigarettes. If you are on the patch, use dip, chew tobacco, smoke cigars, or even use the new e-cigarette, you may be classified as a smoker. Thinking about quitting? Normally you must be tobacco or nicotine free for 13 months. Some companies are willing to change this classification mid-term, others refuse. So, if you are planning to buy life insurance and then quit afterward, make sure the company will allow the class change after the policy has been issued.