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5 easy ways to save on life insurance rates

Apr 24, 2019 6 Minute Read

Think you can’t afford life insurance? Truth is, it’s actually cheaper than most people think. In fact, one study found that half of consumers think life insurance is three times more expensive than it actually is, and millennials overestimate the cost five times over. That said, if you’re looking to bargain-hunt on life insurance rates, here are some ways to make that monthly premium even more affordable.

Right-size your coverage.

You know how the jumbo-sized peanut butter often winds up costing less per serving than the small jar? Well, the same is true with life insurance – it can pay to buy in bulk. Depending on how much coverage you buy, life insurance companies provide price breaks at certain levels. When you’re shopping for life insurance, ask about price breaks for the policy you’re considering. It might be that buying another $50,000 in coverage costs virtually the same – or possibly even less in some cases – than a smaller policy.

On the other hand, there’s no sense overpaying for more coverage than you need. Most people don’t wind up overinsured, but it’s still important to consider your particular financial needs and insure accordingly. Purchasing five to seven times your income in life insurance is a good rule of thumb.

Buy for the length of time you actually need.

Life insurance rates go up as you get older and your health changes, so buying coverage while you’re young is a definite advantage. To get the biggest bang for your buck, think long-term. Instead of automatically buying a 10– or 15-year policy, consider how long you’ll actually need insurance. If you’ll still have kids in the house or a mortgage in 20 years, go ahead and get 20 years of coverage now. The cost of life insurance typically rises each year as you get older, so if you lock in your monthly rate early on, it will save you in the long run.

In many cases, older adults can also find plenty of affordable options. It’s just a matter of figuring out how much coverage you need and how long you’ll need it. For instance, if you’re in good health and still supporting children or other dependents, then a traditional life insurance policy is a smart move. On the other hand, if your current policy is nearing an end and you’ve developed a medical condition, switching to a simplified issue or guaranteed issue policy may be the way to go, since both types of policies allow you to skip a full medical exam.

It may also be the case that you no longer need a lot of life insurance. If you’re advanced in years, final expense insurance may be what makes the most sense. This type of policy is relatively affordable and is designed to help your family pay for funeral expenses or outstanding financial obligations after you’re gone. Explore more options for life insurance over 50 here.

Shop around.

When it comes to life insurance, there’s no such thing as one size fits all. Each company has its own niche, so depending on your individual needs, you may score a lower rate with one versus another.

A number of factors will determine your premium rate. One of the biggest factors may be a carrier’s build chart, which lists maximum height and weight combinations. Most insurance companies have their own version of this and their standards may vary, so some may offer you a better rate than others based on their particular chart. Tobacco use is another big consideration. If you’re a smoker, different carriers may offer different prices based on how much you smoke and the products you use (like cigarettes, e-cigarettes, cigars, or marijuana).

The best thing to do is get quotes from a few different companies, and then compare which policy is the better value. An agent that works with multiple life insurance companies may make it easier to compare options and find an affordable policy.

Be prepared for your medical exam.

When you’re buying life insurance, your current health and your medical history are big factors in determining how much you’ll pay. That’s why you may need to take a medical exam to get covered. It’s nothing to worry about, and with a little preparation ahead of time, you can help ensure the best possible results and a favorable rate. A few tips to keep in mind:

  • Fast for eight to 12 hours beforehand (schedule the exam bright and early to make it easier)
  • Avoid high-cholesterol, fatty, or salty foods at least 24 hours ahead of time
  • Avoid tobacco, alcohol, or caffeine for 8 hours beforehand

For more ways to prep, check out our tip sheet, “Acing Your Life Insurance Medical Exam.” One other money-saving suggestion? Don’t put off buying life insurance in hopes of getting healthier first and lowering your premium. Premiums typically go up each year, so buying now may help you lock in a lower rate. Besides, most insurers require you to be tobacco-free for a least a year to qualify for a lower rate; meanwhile, your rate might keep going up.

Pay your premiums annually.

Most life insurance companies offer a discount if you pay your premium annually, with annual savings around 5 percent on average. So if you’re able to pay your premium upfront, this is the way to go. Typically, the fewer the payments you make over the course of the year, the less you’ll pay as a whole.

One final thought: While saving money on life insurance is great, it’s also important to look at the value of what you’re getting for your money. Make sure you choose a financially stable company that can meet all your coverage needs.

Got enough to make a decision? If not, we can help you find the coverage that’s right for you. Start by getting a quick quote in just one minute here.


At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.