4 Quick Tips to Getting Affordable Term Life Insurance
No one likes to pay more than they need to for a product or service. I think that's true for life insurance as well! Can you get term life insurance at a good price? Absolutely. Here are our 4 quick tips to getting affordable term life insurance.
Tip #1 Save Your Age if You Can
Age makes a difference in all life insurance. Generally, the younger you are, the more affordable term life insurance will be. So one way to save money is to buy a policy now rather than waiting until next year or the year after that!
Another way to save on your premium is to choose to backdate your policy up to six months if you can. How does this work?
- Most life insurance companies use what is called age nearest to determine your age for life insurance. Another way to think of this is that at your half birthday you turn a year older for life insurance calculations. (Some companies use your actual age, and backdating works the same for them.)
- If you are coming up to the age change, or just past, or even 5-6 months past, by backdating to the day before the age change you get the lower premium. You have to pay the premium from that date, but depending on the difference in cost, it can save you money (and sometimes a lot of money) over the course of your policy.
Tip #2 Full Disclosure
Even if you fudge the truth about your age and weight with friends, you need to be upfront and totally honest with your life insurance carrier. Here's why...
- If your agent knows your "issues", both medical and otherwise they can steer you to the carrier that will look most favorably on you (for underwriting purposes!).
- Additionally, your agent can send a cover letter with your application if needed to explain something different or unusual and put the best light on it so that the first impression the underwriter gets is better than if you said nothing.
- Most likely, the insurance carrier will find out the truth in your health exam or from the MIB or your medical records. Better to be open because if you appear to be hiding something it only makes them wonder what else you might be hiding.
- If somehow you did manage to pull the wool over their eyes, you might regret it. Life insurance policies have a contestability clause which means if you die within two years of a condition you did not reveal to them, they can deny paying death benefits.
So be sure to tell the truth! In the long run, it will be for the best.
Tip #3 Sometimes More Costs Less in Term Life Insurance
You may have your mind set on a particular amount of term life insurance you need. However, you might find that getting a large amount is cheaper, or the same price.
There are price breaks for term life insurance at $250,000 and $1,000,000. What that means is the cost per $1000 of insurance goes down at those points.
So getting affordable term life insurance may mean buying a little more insurance than you planned.
Tip #4 Talk with an Independent Agent
How can an independent agent help?
- Dedicated to finding the carrier that will give you the best rating.
- Can help you understand life insurance options.
- Have relationships with many high quality carriers.
- They have experience and are industry experts.
The Bottom Line
It's very hard to get affordable term life insurance on your own. There are so many different things to know...and check...and consider. Speak to an independent life insurance agent. They can help you get the insurance that meet your needs at the best price.
Photo Credit: Tony Crescibene