Let’s be honest – who doesn’t love to save money? I know I do. Especially whenLife Insurance for Retirees it comes to less glamorous (but necessary) purchases like life insurance.
So if you could save money on your policy, and spend that money on other fun things (cruise, anyone?), why wouldn’t you?!
In this article, we’ll discuss our 12 best tips to save some serious moo-lah on your life insurance policy.
Quick Article Guide:
- Buy Your Policy ASAP
- Work with an Independent Agent
- Take Your Health Seriously
- Layering Your Policies
- Go Term Instead of Permanent
- Pay Your Premiums Annually
- Take the Medical Exam
- Guaranteed Level Premiums
- Determine Your Coverage Needs
- Don’t Choose Lump Sum
- Ask for a Reevaluation
- Quit Smoking
- Questions? We Can Help!
When it comes to buying life insurance, typically the younger and healthier, the better. No to say you can’t buy a policy when you’re older or have health issues, but your rates are going to be more expensive.
If you purchase a policy when you’re in your 20s or 30s and have little to no health issues, you’ll most likely qualify for a “preferred plus” or “preferred” rate class, which means your premiums will be much lower per month.
If you’ve read any of our other articles, you probably saw this coming. We always stress the importance of working with an independent agent rather that an agent that works with one company. When you speak to a life insurance agent for a specific company, they are only allowed to sell you a policy from said company. That means that what they offer you for $80/month, another company could offer for $60/month. Those types of agents tend to work off commission as well, so they will try to do everything they can to lure you in and purchase a policy.
When you work with an independent agency like JRC, we have the ability to shop over 45 top-rated life insurance companies, all of which have different niches, or fields they specialize in. So not only will we be able to find a company that will cater to your needs, but we can do so while getting you approved an affordable rate!
Like we said previously, when you’re in good health, you get better rates. So if you’re currently not exercising, smoking, and eating junk food, you’re probably not going to qualify for a very good rate class.
That being said, it’s never too late to start investing in your health! The American Heart Association recommends 150 minutes of physical activity each week, whether that be lifting weights, playing a sport, or even walking. Doing that and modifying your diet a bit (eating fruit and veggies won’t hurt you, I promise), and you’re on your way to better rates.
Oftentimes, our need for coverage lessens as we get older. So why would we buy a 30 year term policy with $500,000 in coverage when we might only need $250,000 in coverage in 10 years?
This is where layering your policies comes in. Instead of buying just one policy, you buy two separate policies with different lengths.
For example, say you need $250,000 in coverage for your teenagers’ college expenses, which should be completed in the next 10 years. You also would like $500,000 to cover your family once you retire, which you expect to in about 20 years.
So instead of buying a 30 year term with $750,000 in coverage (which would cost you much more a month), you buy one $250,000 10 year policy and one $500,000 20 year policy. In 10 years when the first policy finishes, you’ll be paying way less in premiums in comparison to the $750,000 30 year policy.
Piggybacking off of our last tip, term life insurance is always going to be more affordable than permanent policies are. With a term policy, you get coverage for a specific number of years (anywhere from 5-30), as where permanent coverage is well…permanent. Once you buy it, you are covered for life. So it makes sense why it would be a more expensive policy.
Fortunately, term life insurance policies oftentimes have a conversion rider you can add. The conversion rider allows you to convert your term policy to a permanent policy whenever you choose to do so (although there is an age limit; 70-75 years old is the cut off for most companies). With this rider, you get the affordable premium of a term policy, but the benefit of permanent coverage later on. It’s a win-win!
Yes, it seems like a big number if you look at it annually versus monthly, but think of it this way – when you pay your premiums annually versus monthly, you get it done with all at once, and most life insurance companies will offer you a 8 or 9% discount if you choose to do so.
As you may know, many life insurance companies ask you to take a medical exam when applying for coverage. They send a licensed phlebotomist, a nurse, or a medical doctor to your work or home (no need to go to a doctor’s office!) to perform a quick 30-minute exam.
The exam is totally free, and it could help you save some serious cash. If carriers see that you’re willing to take the exam, and your health is relatively good, they will more often than not offer you lower rates.
Guaranteed level premiums mean that your premiums won’t increase as your term goes along – some terms will increase premiums annually, once every five years, etc. Ensuring that you choose a policy with a guaranteed level premium means that you will be paying the same premium throughout the entire duration of your term.
Sounds simple enough, but some people don’t even realize their premiums will increase when buying their policy! So double check with your agent before finalizing everything.
Many times, people overestimate how much coverage they really need, and they end up overspending on their premiums. When working with your independent agent, determine how much coverage you really need.
If you’re the sole breadwinner of your household with a mortgage and family, you’re probably going to need more coverage than a single person who is renting an apartment and has no dependents.
Thankfully, we have a handy dandy article on how to determine your coverage here.
Most people assume that you can only receive the death benefit after the insured has passed as one big lump sum. However, there are some companies that allow you to opt for receiving a portion each year, instead of all at once.
This is a good option if your spouse/family will need income replacement once you pass away, you have a beneficiary with special needs, or you feel your spouse won’t be able to successfully manage the lump sum. Talk with your agent to see which companies offer this option.
If you’ve already bought life insurance, but have been working really hard on improving your health for the past year, ask for a reevaluation on your health class! The underwriter will ask you to retake the medical exam, and compare the new results to your previous ones.
If your health has truly improved, you might just get bumped up a health class. You know what that means? Lower rates! Cha-ching.
This should go without saying, but stop smoking. Seriously, stop smoking. Smoking vastly increases your risk to life insurance carriers, and you’ll end up paying a whole lot more in your premiums than a non-smoker will.
Keep in mind that you must be nicotine-free for a least a year with most carriers to get non-smoker rates, so there’s no better time to start than right now!
We’re all about saving money – especially when it comes to life insurance.
At JRC Insurance Group, our agents do not have sales quotas to meet, we’re just genuine people who want to match you with the best life insurance company possible. We work with over 45 top-rated companies, and have no doubt that we can find a company for you.
If you would like to receive an accurate quote based on your age and health, as well as which type of policy and amount of coverage you should choose, give us a call. Toll-free, no obligations: (855) 247-9555.
Our services are completely free, and there is not cost to apply for coverage. Give us a call today, or you can request a free online quote below to compare rates from more than 45 life insurance companies in less than a minute.