9 Tips to Save Money When Buying Life Insurance

1. Ask About Life Insurance Price Breaks

To save money on certain types of life insurance policies, such as term life insurance, ask about more coverage, not less. Some companies offer life insurance price breaks, also called “milestone discounts,” for higher coverage amounts.

For example, you might get a break for getting $250,000 in coverage instead of $200,000. So even if you figure out that you only need a certain amount of coverage to protect your loved ones, it may be worth asking how much a higher level of coverage would cost.

You could end up saving money on life insurance, while getting your loved ones greater protection.

2. Choose a Life Insurance Policy That Requires a Medical Exam

To get approved for certain types of life insurance, such as term or permanent life insurance, you often have to first take a life insurance medical exam. The results from that exam, along with your answers to a health questionnaire, help the life insurance company assess your level of risk for passing away prematurely.

However, there are also certain policies that allow you to forgo the life insurance medical exam and questionnaire completely. There are a number of reasons why one might want to skip a medical exam, such as health issues.

But, if you’re generally in good health, buying a life insurance policy that requires a medical exam will typically be less expensive than buying one that doesn’t.

3. Customize Your Term Length

Term life insurance policies last for a specific duration of time, typically between 10 to 30 years.

However, some life insurance providers allow you to choose the amount of time that best serves your needs, in one-year increments.

For example, you might be 17 years away from paying off your mortgage. You can get a 17-year term life policy to match that mortgage commitment.

The longer your term duration, the more you’ll likely be paying for it. By customizing your term length, you’ll only pay for coverage during the years you need it most.

4. Get Extra Life Insurance Coverage Through a “Life Insurance Rider”

A life insurance rider is an addition or an amendment to a life insurance policy. Often times, it’s a great way to get extra life insurance coverage for minimal additional cost.

There are number of different types of riders, such as accidental death benefits, child riders, terminal illness riders, or waiver of premium riders.

For example, you may be able to get accidental death benefits, which would pay out money in addition to the benefit amount of your life insurance policy. It’s also advantageous because accidental death coverage is typically offered as a separate policy. By adding it as a rider to your life insurance policy, you’d only have to manage one policy instead of two.

5. Ask About Life Insurance Renewal Guarantees

With a life insurance renewal guarantee, you’re guaranteed the chance to renew your term life insurance policy — without retaking the medical exam.

It’s true that your life insurance premium will be based on your current age — not the age you were for your initial term, but you won’t have to start the shopping process all over again.

This is particularly valuable if your health has declined. Trying to buy term life insurance from scratch with poor health could mean paying a higher premium — or not qualifying for coverage at all.

6. Compare Your Life Insurance Payment Options

Some insurers allow you to pay monthly, quarterly, semi-annually or annually. Paying annually can often save you money. Also, there are often fees for monthly billing (these are called “fractional premiums”). It might pinch to make an annual payment, but it’s worth asking about in order to save money in the long run.

7. Buy Life Insurance While You’re Young

Term life insurance is generally less expensive when you are younger and in relatively good health. That’s not generally the time in life when most of us think about buying term life insurance, but actually, it’s the best time to save money.

Waiting until later in life when you’re older or might be dealing with medical issues can drive up your premiums — or it could even prevent you from qualifying for term life insurance at any price.

8. Buy Life Insurance that Aligns with Your Lifestyle

Are you a skydiver? Underwater welder? Pilot? If you have a high-risk hobby or occupation, be sure to shop different companies when buying life insurance. Each life insurance provider rates risks differently, so you might be able to find one that charges less for high-risk activities. Quality term life insurance may offer a good price for your lifestyle.

9. Look for Life Insurance with Living Benefits

Some companies may offer term life insurance policies with “living benefits.” All term life policies offer your loved ones some degree of financial protection, should you pass away. But term life policies with living benefits may be able to provide you or your family with financial help during your lifetime — when you need it most. Living benefits are typically available to those who have a chronic, critical or terminal illness.

It can help to offset the cost of medical bills or other expenses, allowing you and your loved one to focus on what matters most — enjoying every moment together.