It’s probably safe to say that the person who coined the phrase “good is not cheap and cheap is not good” likely did not have life insurance in mind, especially given the fact that rarely has life insurance been more affordable than it is today!
But it’s important to remember, that price shouldn’t be your only consideration when choosing life insurance. Instead, your focus should be on finding the best life insurance policy at the cheapest price!
With this in mind, let’s now discuss how one can go about doing this exact thing!
How to Find Affordable Coverage
Determine your life insurance need:
Determining your life insurance needs is an important step in selecting a policy that provides adequate coverage for you and your family. After all, you’re probably not going to get a great deal on your insurance if you end up purchasing the wrong amount of coverage.
Here are some factors to consider when determining your life insurance needs:
- Dependents: If you have dependents such as children or elderly parents who rely on you for financial support, you may need a higher coverage amount.
- Debts and expenses: Consider your current debts such as mortgage, car loans, credit card debt, and other expenses such as funeral costs, education costs for children, and other ongoing expenses.
- Income replacement: Consider the income that would need to be replaced if you were to pass away. This may include your salary, bonuses, and other sources of income.
- Future expenses: Consider any future expenses you may have such as college tuition for children or retirement savings for a surviving spouse.
- Existing assets: Take into account any existing assets you have that can be used to cover expenses, such as savings accounts, investments, and retirement accounts.
- Your health: Your health and medical history may also impact your life insurance needs and the cost of your premiums.
Tools such as the calculator below can also be useful when trying to determine the amount of life insurance you may need.
Your total cost for years of retirement at per year is:
Assuming you retire at age , you have investing years left. Using a annual rate of return for your investments, you're expected to earn a total of .
Understand the types of policies available:
When shopping for a cheap life insurance policy, it’s also important to understand the different types of policies available to you and how these different types of policies will differ in price.
Here are the three main types of life insurance policies:
- Term Life Insurance: Term life insurance provides coverage for a specified period of time, such as 10, 20, or 30 years. This type of policy is typically the most affordable option and provides a death benefit to your beneficiaries if you pass away during the term. Term life insurance does not accumulate cash value and is best for individuals who want coverage for a specific period of time, such as while paying off a mortgage or while children are still dependent.
- Whole Life Insurance: Whole life insurance provides coverage for your entire life, as long as premiums are paid on time. This type of policy also accumulates cash value, which can be borrowed against or used to pay premiums in the future. Whole life insurance is typically more expensive than term life insurance, but provides permanent coverage and a savings component.
- Guaranteed Issue Life Insurance: Guaranteed issue life insurance is a type of whole life insurance that is designed for individuals who may not be able to qualify for traditional life insurance due to health issues. This type of policy does not require a medical exam or health questions, but premiums are typically higher and coverage amounts may be limited. Guaranteed issue life insurance policies will also contain a waiting period of 2-3 years before they will provide coverage for natural causes of death.
Shopping around different life insurance companies is an essential step in finding the most affordable policy that meets your coverage needs.
Here are some tips on how to shop for life insurance:
- Get quotes from multiple companies: It’s important to compare rates from several different insurance companies to find the best coverage at the most competitive price.
- Compare policies: When comparing policies from different companies, make sure you are comparing policies with the same coverage amounts and term lengths. Don’t be afraid to ask questions and clarify any details you don’t understand.
- Check the financial strength of the company: Before purchasing a policy, make sure to check the financial strength of the insurance company. You want to ensure that the company has a good track record of paying claims and will be able to provide the coverage you need for the long term.
- Read reviews and customer feedback: Check online reviews and customer feedback to see how other policyholders have rated the insurance company’s customer service, claims process, and overall satisfaction.
- Work with a licensed insurance agent: A licensed insurance agent can help you navigate the complex world of life insurance and provide expert advice on finding the best policy for your needs.
Now up to this point, we should point out that we’ve really only been talking about how to find the cheapest life insurance QUOTE. So let’s now turn our attention to what one can do to qualify for the cheapest quote they have found.
Factors that will be considered when applying for coverage
When applying for life insurance coverage, there are several factors that insurance companies will consider to determine your eligibility and the cost of your premiums. Here are some of the key factors that may be taken into account:
- Age: Your age is a significant factor in determining the cost of life insurance premiums. Generally, the younger you are when you apply for coverage, the lower your premiums will be.
- Health: Your overall health and medical history are critical factors in determining your eligibility for coverage and the cost of your premiums. Insurance companies may ask for information such as your height and weight, whether you smoke or use tobacco, any pre-existing medical conditions, and any medications you are taking.
- Lifestyle: Certain lifestyle factors, such as engaging in high-risk activities like skydiving or rock climbing, may affect the cost of your premiums.
- Occupation: Some occupations may be considered higher risk than others, which may affect the cost of your premiums. For example, if you work in a hazardous profession such as firefighting or construction, you may pay more for life insurance.
- Family medical history: Insurance companies may also ask about your family’s medical history to determine your risk of certain hereditary conditions.
- Coverage amount: The amount of coverage you are seeking will also impact the cost of your premiums. Generally, the higher the coverage amount, the higher the premiums will be.
It’s important to be honest and thorough when providing information to insurance companies during the application process. Failing to disclose relevant information or providing false information could result in your policy being voided or your beneficiaries being denied a payout.
Steps involved when applying for life insurance
Here are the typical steps to apply for life insurance:
Complete an application: After you’ve chosen an insurance company and policy that you think you’re going to want to apply with, you’ll need to complete an application. The application will ask for information about your health, lifestyle, and other factors that could affect your eligibility for coverage.
Medical exam: From there, you may need to undergo a medical exam (if required): Some insurance companies require applicants to undergo a medical exam to assess their health. The exam may include a physical exam, blood tests, and other diagnostic tests.
Wait for underwriting: Once you’ve submitted your application and any required medical information, the insurance company will review your application and make a decision about your eligibility for coverage. This process is called underwriting.
Review and accept your policy:
If you are approved for coverage, the insurance company will provide you with a policy. Review the policy carefully to make sure it provides the coverage you need, and accept it if you are satisfied with the terms.
Pay your premium: You’ll need to pay your premium to keep your coverage in force. Your premium amount will depend on your age, health, and other factors.
Exam vs No exam
Not all life insurance companies will require their applicants to complete a medical exam. Instead, some insurance companies may offer an accelerated underwriting process commonly referred to as a simplified issue policy which can significantly speed up the application process.
Here are some pros and cons of opting for a no-exam life insurance policy:
- Convenience: Without a medical exam, the application process can be faster and more convenient since you won’t need to schedule an appointment with a doctor or take time off work.
- Privacy: A medical exam may require you to disclose personal information about your health, which some people may prefer to keep private.
- Cost: No-exam policies can be more expensive since the insurance company is taking on more risk by insuring you without detailed knowledge of your health.
- Lower coverage limits: Without a medical exam, insurance companies may offer lower coverage limits since they are unable to assess your health accurately.
- Limited options: Not all insurance companies offer no-exam policies, so you may have fewer options to choose from.
- May be more difficult to qualify for clients with pre-existing medical conditions to qualify for.
Not all life insurance companies have the same underwriting guidelines. Underwriting guidelines are the criteria that insurance companies use to assess an applicant’s risk and determine their eligibility for coverage. Here are some factors that can vary between insurance companies underwriting guidelines:
- Health conditions: Some insurance companies may be more lenient or more strict in their underwriting of certain health conditions. For example, one company may consider a history of high blood pressure to be a higher risk than another company.
- Age: Some insurance companies may have different age restrictions for certain policy types or may have different age brackets that affect pricing.
- Occupation: Some insurance companies may consider certain occupations to be higher risk than others, such as those with dangerous or physically demanding work.
- Lifestyle factors: Insurance companies may consider lifestyle factors such as smoking, alcohol consumption, and recreational activities when underwriting an application.
Because underwriting guidelines can vary between insurance companies, it’s important to have an understanding of how a particular life insurance company will view your unique application prior to submitting it for review. This is where working with an independent life insurance agent familiar with many of the top insurance carriers will be extremely helpful.
We can help…
We here at IBUSA understand that shopping for life insurance can be confusing, and want to make sure that you find the best possible policy at the most affordable price can almost seem impossible at times. But don’t fret, because we have everything you need to find the right policy for you….
- First, as a life insurance brokerage, we have access to dozens of different insurance companies for you to choose from.
- Second, because we are not tied to any one insurance company, we can provide unbiased advice and recommendations based on your specific needs and circumstances.
- And third, our licensed and experienced agents are second to none at providing guidance and education on the different types of policies available, as well as helping their clients navigate through the underwriting process.
All you need to do is give us a call and let us show you how we can save you time and money!