In general, term life insurance policies will give you the most insurance for the cheapest rate. The premiums are less expensive than other types of insurance, and you only have to pay for insurance during the years when you really need it. Term life insurance costs have been dropping in recent years due to a healthier population and stiffer competition between insurance companies. Customers can purchase a term life insurance policy today for 33% less than they would have paid just 10 years ago. Once you understand what drives term life insurance rates, you’ll see how easy it can be to find the cheapest life insurance rates.
One of the main forces driving the falling cost of term life insurance is the data coming through the glowing screen before you; the Internet. Insurance quote sites like ours have made it easy for anyone to compare several different life insurance policies side by side from the comfort of a home computer. It’s become so easy to compare prices that insurance companies have started pricing policies more competitively, always looking to beat each other out for your business.
In the past, life insurance companies calculated the risk of death based on general averages for male and female life expectancies. They set premiums based on a cookie-cutter formula that meant many low-risk policyholders paid the way of some higher risk individuals. The insurance company did have good data regarding life expectancy and other health factors like whether a person smoked. In general, premiums reflected only a person’s age and gender.
Today’s life insurance policy premiums arise from research that looks more closely at the applicant’s health. Premiums now reflect an individual’s risk more accurately using data about the individual’s cholesterol level, family medical history, and other factors that are far more predictive and realistic. This means that a health applicant will get a much cheaper term life insurance quote than someone with stronger health risk factors.
Another reason coverage rates keep falling is the overall death rates for those under 50 are falling. Modern medicine is helping us live longer. Many individuals buy life insurance and never need it, a good side of the equation to be on indeed. Insurance companies can afford to lower premiums each year that their profits rise because of fewer deaths.
Becoming a good risk is the best way to save on a life insurance policy. If you maintain a healthy lifestyle, you will present a lower risk of dying during the coverage period. Life insurance companies understand which health problems pose the highest risk, and they will consider those health problems when you apply for your policy. If you are carrying a few extra pounds or have high blood pressure, your rates may be higher than they would be if your weight and blood pressure were within healthier ranges.
You can help keep your life insurance premiums lower by taking better care of yourself. The same unhealthy lifestyle choices that can kill you are killing your chance of saving on life insurance too. Choose healthier diets and exercise so that you can lose weight. Stop smoking. Drink alcohol in moderation. Create a regular exercise regimen that fits comfortably into your schedule. Avoid fatty foods and eat more fruits and vegetables daily. If you can shift a few of these habits toward a healthier and safer lifestyle, the change will show up in your health records and be obvious in any medical exam you might be asked to take.
If you really want to find the cheapest life insurance rates, you don’t need to ask ten friends and contact everyone in your LinkedIn or Facebook networks. Gone are the days when you needed to “know a guy” in the business. You can do your research online so agents don’t have opportunities to steer you towards other policies that offer them higher commissions and hand you a raw deal.
Term life insurance is simple and straightforward. There is very little difference from one term life insurance policy to the next, so you don’t need a specialist to explain things to you. It’s a simple product with simple pricing. All you need to do is go online and put in for some quotes from competing companies.
Besides, finding an agent who will even talk to you about term life insurance is difficult these days. Commissions are down, so agents have to push a high volume to make a reasonable profit. It’s much easier to sell a few high-commission policies than a high volume of low-commission ones. Ask around and you are likely to find agents trying to sell costly whole-life policies, all the while hoping you don’t do your homework and find out whole-life insurance is a one of the worst deals going.
Let’s face it; younger people are generally healthier people. That fact is reflected in lower life insurance rates. Although you should definitely take the time to research the options, don’t grow old doing it. The younger you are when you purchase the policy, the lower your premiums will be.
Term life insurance policies offer a rate and then guarantee the rate for a set number of years. If you wait too long, you will be locked into a higher rate. Worse, you could pass away never having bought a policy and leaving a family in need.
Life is incredibly unpredictable, and it is important to have the coverage your family needs in case something unexpected happens. Most people don’t think about life insurance until well past the time they should have bought it. It makes sense to purchase coverage right away so your dependents are protected from the earliest date possible.
This brings up another important point. The only good reason to buy life insurance in the first place is to offer your dependents financial security. If you have no dependents, you have no need for life insurance. Many make the mistake of buying life insurance as a way of leaving an inheritance to their grown children. If you want to leave an inheritance, there are much cheaper ways of doing it.
Assuming you do have dependents to care for, figuring out how much you need is a simple matter. Calculate your annual salary and subtract the money you pay towards taxes and your own personal share of living expenses. This is how much your dependents will need each year to keep the same standard of living if they lost your income. Now calculate how many years remain until your dependents reach maturity and multiply that number times the annual needs of your dependents. That figure is the amount of life insurance you need to buy.
When you talk with an agent, it’s an opportunity for the agent to try to up-sell different types of coverage. Know that term life insurance is the smartest choice. Any financial expert will tell you that. So, instead of comparing types of insurance, be smart and compare quotes from several term life insurance companies. Using online quotes to compare policies is the best way to save time, anxiety, and money when you shop for term life insurance.
Experts recommend that you look into your term life insurance options every few years to see if the rates have changed in your favor. Right now, term life insurance policy premiums are still on a downward trend, but no one can say how long that will last. Even if you are already paying into a life insurance policy, you might be able to save some money by canceling your original policy and opening a new one. This is especially true for people who are under the age of 50. It’s highly likely you will be able to find better coverage for lower premiums if you do some research every three or four years.
Saving on term life insurance is simple:
• Stick to term life
• Only buy it if you need it
• Buy while you’re young
• Compare quotes online
• Only buy as much as you need
• Check back every few years for a better rate
By following these simple steps, you can feel confident you’re getting the cheapest term life insurance. Even better, you’ll know your dependents will be protected when they need it most.