Term life insurance rates remain at historic lows. Recent legislative and regulatory changes have caused some life insurance companies to increase rates, but term life remains an outstanding value.
The following are three quick and easy ways you can save even more on your term life insurance policy:
Choose Your Life Insurance Company Wisely
Use a reputable online life insurance brokerage to comparison shop. There are a few good ones out there (and one or two ‘outstanding’ ones!). Find one you like and check rates from all the companies they offer. Don’t bother comparing one online broker to another for the same life insurance company. The life insurance company sets the premium rates; therefore, you will pay the same for Company XYZ regardless of which online broker you choose.
Pay Your Premium Annually
This one is simple but often overlooked. It’s in your best interest to spring for the entire premium up front if possible. Here’s why:
Example Policy: $500,000 / 10-yr term / Preferred Rating Class / 35-yr old Female
Payment Mode | Modal Amount | Annual Total | Difference |
| Annual | $210.00 | $210.00 | None |
| Semi-Annual | $107.10 | $214.20 | +$4.20 or 2% |
| Quarterly | $54.60 | $218.40 | +$8.40 or 4% |
| Monthly | $18.38 | $220.56 | +$10.56 or 5% |
You can see that paying in any other mode than annual will cost you more; up to five percent more if you pay monthly. Of course, the life insurance company charges a slight premium for the convenience of spreading your premium out over the course of the year. Keep that in your pocket by paying annually.
Prepare For Your Paramedical Exam
The paramedical exam (paramed) is not the big deal many make it out to be. Sure, it’s a bit of an inconvenience, but it could save you money in the long run if you prepare for it. If you are completely opposed to the paramed exam, check out Non-Medical Term Life Insurance. Otherwise, read on.
To pull off a stellar paramed exam, consider the following:
- Fast for 8-12 hours. This will help ensure more accurate blood chemistry results (think cholesterol).
- Avoid alcohol for 24 hours before the exam. This shouldn’t require an explanation. But just in case, alcohol does funny things to your liver. Insurance companies want to know the condition of your liver. Give it a brief rest.
- Avoid exercise or excess activity before the exam. The examiner will check your blood pressure and heart rate. You want these to be in the normal range. Intense activity may also cause a temporary elevation of liver enzymes (that darn liver thing again). Don’t take chances.
- Provide the examiner with a list of all medications. And make sure she notes these on the exam paperwork.
- Review the paperwork completely. Make sure your height, weight, blood pressure, etc. are all recorded correctly. Resolve any discrepancies before the examiner leaves. Don’t skip this step!
Of course, unexpected things can happen during the underwriting process, and there are no guarantees until the life insurance company makes an offer. But if you follow these three simple tips you will be well on your way to saving money on your next term life insurance policy!
