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Cheap Life Insurance.

Here at IBUSA, we’ll often have folks call and ask us, what’s the cheapest life insurance policy they can buy? This might seem like an easy question to answer, but the truth is IT’S NOT!

It’s not because there are many different life insurance products one can choose to purchase, each designed to meet a different need.

Not to mention…

The fact that not everyone is going to be able to QUALIFY for the same “kind” of life insurance due to a pre-existing medical condition either.

This means that for us to be able to answer…

“What’s the cheapest life insurance policy for you?”

We’re going to need to know two things. First, we’re going to need to know how much life insurance you’re looking to buy (How much do you want your family to receive when you die?). And second, what “kind” of life insurance will you be able to qualify for?

“And here is where we’ll often run into trouble.”

You see…

For some reason, a lot of the same folks who ask us, “what’s the cheapest life insurance policy that they can buy?” also tend to say that they don’t have TIME or the DESIRE to answer many of the questions we will need to ask to determine which insurance company will be the “cheapest” for you!

And unfortunately…

For clients unwilling to take the time to find the “cheapest” life insurance policy available, what they usually end up buying is either a more expensive policy than they might have otherwise been able to qualify for or a policy that doesn’t quite meet all of their needs (such as a guaranteed issue life insurance policy or an accidental death policy)!

Sadly…

Many of these same consumers won’t realize their mistake until it is too late!

For this reason…

We wanted to take a moment and list the top 10 things one can do to increase their chances of finding and qualifying for the “cheapest” life insurance policy that they can buy and provide some explanation behind these techniques.

This way, even the most adamant customer who doesn’t want to answer any questions and only wants a quote right away can realize that buying life insurance isn’t something that should be rushed.

That and…

“A quote is only a quote.”

It’s not a promise. It’s just a life insurance agent “estimate” about what you should have to pay for your insurance based on the information you gave him or her. This usually means that the less information you give him or her, the greater the likelihood that your quote will be inaccurate.


Top 10 Ways to Buy a Cheap Life Insurance Policy.

 


 

#1. Buy a Term Life Insurance Policy.

The best way to find a cheap life insurance policy is first to consider all your Term Life Insurance Policy options. This is because Term Life Insurance is by far the “cheapest” type of life insurance that a person can purchase. Especially when compared to a whole life insurance policy.

This is why…

Most financial advisors will recommend that someone purchase a term life insurance policy because they can provide an enormous amount of financial protection for a relatively small cost. Now, one might ask “why” term life insurance policies are so much cheaper than whole life? Or, conversely, why do whole life insurance policies cost so much more than term?

The answer is…

Of course, if you purchase a whole life insurance policy and continue to make your payments up until you die, your family will be guaranteed the death benefit of such a policy.

Unfortunately isn’t always the case with a term life insurance policy because, with a term life insurance policy, it is possible to “out-live” the term in which case your beneficiary would be left with nothing.

Which may not…

Be all that bad assuming that you purchase a long enough “term” so that when it ends, your need for insurance has disappeared. Or at least that’s the theory that most financial advisors make base their recommendations upon.

For our purposes here, where we’re simply trying to help someone find the “cheapest life insurance,” we’ll simply state for the record that Term is much cheaper than whole life, but if you want to learn more about which is better for you, please check out the following article: Term Life Insurance vs. Whole Life Insurance {Pros and Cons of Each}.

#2. Play with the numbers.

Let’s assume that you need a 200,000 dollar term life insurance policy to protect your family for the next 20 years. Don’t be afraid to look at what a 250,000 dollar term life insurance policy for the next 15 years might cost. Or maybe a 100,000 dollar term life insurance policy for the next 30.

We say this because…

Different insurance companies will often have a somewhat “odd” pricing point for different amounts of life insurance for different “term” periods. So, while you may find that a 200,000 dollar term life insurance policy for the next 20 years costs more than you want to spend, a 250,000 dollar term life insurance policy for the same amount of time may be actually cheaper!

This is why…

We always encourage our clients first to get a general “idea” about what it is that they need and then “play” with the numbers a bit and see if they can’t find a better and “cheaper” deal.

#3. Try “layering” Different Policies.

OK, let’s assume that you want to buy a 500,000 dollar life insurance policy to cover the cost of a 30-year mortgage and make sure that you’re 10-year old’s college education would be paid for.

The only problem is that a 500,000 dollar 30-year term life insurance policy is too expensive for you to take on right now.

In cases like these…

It may be cheaper for you to purchase two separate life insurance policies (think mulitple life insurance policies) that will accurately protect your true insurance needs. You see, while you may need 500,000 dollars in coverage today, it’s conceivable that in 15 years after your 10-year-old has graduated from college, a good portion of your insurance needs will disappear.

It’s also true…

That a large “chunk” of your 30-year mortgage will also be paid off as well, this is why some folks may find that it may be cheaper for them to buy two different life insurance policies totaling 500,000 dollars each with a separate term length.

For example…

Rather than buy one 500,000 dollars 30-year term life insurance policy, it may be cheaper for you to buy one 250,000 dollar 15-year term life insurance policy and one $250,000 30 year term life insurance policy. This way, you will have a total of 500,000 dollars in coverage until your child graduates, after which one policy will end, leaving you another $250,000 in coverage until your mortgage is paid off.

We should not that…

This won’t always make things “cheaper,” but it is one thing you should consider because, in some situations, it might.

OK, So now that we’ve talked about how you can choose different life insurance types as a way to find a “cheap” life insurance policy, let’s now take a moment and discuss how an individual can make changes to their physical health to qualify for a “cheap” life insurance policy.

#4. Apply today!

Since age is one of the most important factors determining what one will pay for their insurance, it only makes sense that “applying today” is probably a good idea if they want to secure the “cheapest” rate for their insurance.

But here’s the deal…

Most insurance companies don’t look at one’s “actual age” in determining what rate one should pay.

Instead, most insurance companies use one’s “insurance age” to make this determination.

“What’s the difference you ask?”

Well, the difference is that most insurance companies are going to either round up a year or down a year depending upon how close you are to your birthday. So, if you’re going to turn 40 years old three months from now, we’re sorry to tell you this, but in the eyes of most life insurance companies, you’re already 40. In fact, you’ve been 40 for about three months.

Which means that…

You’re now going to have to pay the premium of a 40-year-old instead of a 39-year-old. This may not be that big of a difference, however, as one grows older, the price difference from one year to the next starts to get pretty expensive. Especially if you’re goal is to find the “cheapest” life insurance possible. This is why “applying today” may be your best bet!

#5. Lose weight.

Losing weight (even if it’s just a few pounds) is another way a lot of folks will qualify for a “cheaper” rate. Especially if someone is hovering right around a weight cutoff value that could cause them to be placed in a “higher risk” category.

This is why…

We can’t stress enough how important it is for someone to know exactly how much they weigh when first speaking with their life insurance agent. You see, different insurance companies will use different height and weight ratios when trying to determine what rate class someone might fit into.

This means that someone may only be able to qualify for a Standard rate with one company while simultaneously being considered a Preferred with another!

“Which could be a significant difference in price one might be expected to pay.”

Additionally…

We should point out that one’s weight will often vary throughout the day, so if one is considering applying for a life insurance policy that will require a medical exam (traditional term vs. simplified issue life insurance) one should always try to take their medical exam first thing in the morning when one’s weight is usually at its lowest.

#6. Tobacco use.

While it is true that some life insurance companies will consider different “types” of tobacco differently, as a general rule of thumb, if you do you tobacco, chances are you will have to pay more for your insurance than a non-tobacco user. And in some cases that rate “difference” could be as much as three times as much as an equivalent non-tobacco user!

Fortunately…

Some insurance carriers will differentiate between cigar, e-cig, and chewing tobacco users; however, even in cases like these where an individual may be able to avoid a “tobacco user” rate, they usually won’t be able to qualify for the same “non-tobacco” rate that they would have otherwise been able to qualify for which is why any tobacco user ought to quit entirely if they are looking to qualify for the “cheapest” rate possible.

#7. Occupations, Hobbies and Travel Plans.

Occasionally some applicants will find that their idea of having a good time doesn’t match up all that well with an insurance underwriter’s idea of “acceptable risk.” Examples might include those who:

  • Have a passion for sky diving,
  • Work within the logging industry,
  • Or like to do missionary work in places like North Korea, Haiti or Iran (just to name a few).

And while…

It’s probably not realistic to think that someone is going to be able to change their entire lifestyle just so that they can qualify for a “cheap” life insurance rate. There will be those who might.

You see…

There will be those who might be planning on going skydiving for their 40th birthday who may want to postpone applying for coverage until after they have completed their jump (think accidental death policy while waiting) so that their “bucket list” adventure won’t affect the outcome of their life insurance application.

Others who may be able…

To influence how an insurance company will view their passion or occupation may include those who work in or participate in a “dangerous” industry but in the REALLY “dangerous” parts of that industry.

For example, it’s quite possible that you work in the logging industry; however, you don’t actively participate in the “downing” of any trees or the hauling of any lumber.

Instead, your role is to coordinate pick-up and delivery schedules, or perhaps you work in the HR department.

In cases like these…

While it is true that a life insurance company may discriminate against some individuals in certain industries, providing a complete picture of what your daily activities look like may allow you to qualify for a cheaper rate than one of your compatriots who fails to provide this additional clarification.

#8. Shop your options and don’t get fooled by “bundles”.

Since life insurance is usually one of the last “types” of insurance that a person purchases (after home and auto), it makes sense that one of the first places a person might turn to when looking to purchase a life insurance policy would be the same insurance company that they have another “type” of policy with.

And…

Insurance companies know this, which is why they’ll often offer “insurance bundles” as a way of offering discounted pricing to their customers. The only problem is that when a person really examines these “bundles,” what you’re usually going to find is that you may receive a discount on your home and auto policies if you choose to bundle it with a life insurance policy. However, you’re never really going to get a discount on the life insurance side.

The reason for this…

Is because unlike one’s home and auto insurance, where the rate can change on a yearly basis or whenever you file a claim, most life insurance rates (or at least the ones you should consider purchasing) are going to remain stable throughout the life of the policy. This is why they (the insurance company) don’t want to “discount” your life insurance; instead, they’ll offer you preferred pricing on some other “type” of insurance.

The only problem with this is that it may cause you to pay too much for your life insurance to “earn” a discount on some other product, which may only be discounted for a short period of time, leaving you stuck paying more than you should for your life insurance policy!

This is why…

It’s always a good idea to see what your current insurance provider can offer you and then “shop” that offer with several other insurance companies. Something that a life insurance broker would be able to do for you very quickly and easily.

#9. Work with the right agent.

Now when we talk about working with the “right” agent, what we mean is that you’ll want to make sure that you work with an agent that…

  • Understands what you’re hoping to achieve by purchasing your life insurance policy.
    • Are you looking to:
      • Protect any lost wages in the event of a premature death?
      • Cover the cost of a mortgage?
      • Protect a spouse or child?
      • Or maybe just cover the cost of one’s burial or final expenses?
  • Understands how different insurance companies choose who they will and won’t insurance and how they determine what “price” an applicant will have to pay.

And…

One that has access to a wide variety of different life insurance companies that they can choose from so that they aren’t stuck trying to apply a…

“One Size Fits All”

Approach to your needs.

#10. Apply with the right company.

Finally, in order to find the “cheapest” life insurance policy for you, you’re going to need to apply with the “right” company. This means that you’re going to need to understand “why” one particular life insurance company will be “right” for you and why this one company will be the one you should apply with.

The good news is…

That this is something that we here at IBUSA can certainly help you out with. You see, here at IBUSA, our goal isn’t to try and “sell” you a life insurance policy. We already know that you WANT to purchase one. Our only goal is to help you find the best and cheapest life insurance policy that you can qualify for!

So, if you’re ready to see how we can help, just give us a call!

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