UPDATED: Feb 25, 2020
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There’s a plethora of advice online about saving money on term life insurance. Some of the better tips include shopping around for the best rate, comparing quotes from top-rated companies and preparing properly for the paramedical exam. But despite the best intentions of the countless websites vying for your business, there remains one very simple way to save money on term life insurance that is often overlooked. It’s almost TOO easy.
Pay your term life insurance premiums annually.
You went through the process of comparing quotes. You researched the life insurance companies, watched the commercials and decided which one is best for you. You took the paramedical exam, remembering to fast for 8 hours prior (that was fun). You happily provided your blood and urine samples to the examiner, whom you’ve known for all of about 20 minutes. You waited to hear something from your agent, and when you did, the news was good. You qualified for the best rating class, having done all you needed to do to save money on your term life insurance!
Or have you?
When the policy arrives, it’s easy to simply choose the monthly payment option and have the premiums deducted from your bank account. But wait… This is where the easy savings happens. By choosing to pay the premium annually, you could save 5 percent or more! Take a look at this comparison to see the difference paying annually can make.
Male, Age 51, 10-yr Term, $1,000,000
|Monthly||$88.81||$1,065.72||+ $50.72 or 5%|
That, my friends, is an extra $50 in your pocket (or green piggy bank, if you prefer).
So, before you sign the check, credit card form or bank draft authorization, take a moment to consider the savings you can get by paying annually. You’ve gone through so much already, why waste money at this point? It’s the easiest way to save money on your term life insurance!