3 Things You Can do Today to Save Money on Term Life Insurance

There are many easy ways to save money on life insurance that you can do today, and there are many changes you can make that will benefit your health long term, like starting an exercise program or introducing a healthier diet. Follow these three ways to save money on life insurance: 1) determine how much coverage you need, 2) determine how long your policy will be, and 3) pick the right insurance company. Start comparing quotes from multiple companies today with our free tool below.

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Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites.

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Jul 19, 2021

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Term life insurance is the most inexpensive type of life insurance you can buy. But it’s still an expense many people either cannot or will not take on. Despite knowing how important life insurance is for protecting a family or business, many people choose to live without it. In fact, one-third of individuals surveyed by Life Happens and LIMRA wished their spouse or partner had life insurance or more of it. In the unstable world we live in today, that’s a big risk to take.

People with no life insurance believe it costs three times more than it actually does. And those that do have it overestimate its cost by two times. Are you one of them? If so, what if I told you there are steps you can take today to save money on your policy? Would you take them?

Factors That Affect the Cost of Life Insurance

We’ve talked extensively about life insurance underwriting guidelines and the many factors that contribute to the cost of a policy. Some of the primary ones are:

  • Age
  • Gender
  • Health
  • Lifestyle
  • Amount of coverage
  • Length of coverage

Unfortunately, you don’t have control over certain factors such as age and gender. But you do have a say in others like health and lifestyle. There are many changes you can make that will benefit your health long term, like beginning an exercise program or introducing a healthier diet. And these changes can also positively impact your life insurance premium. But it may take a while.

Some Changes Take a While to Pay Off.

Some changes are immediate, while others take more time to produce results. These are some examples of things you can begin to change today, although they won’t translate to lower life insurance premiums right away.

Tobacco/nicotine use – You can quit using tobacco/nicotine products right this moment and start experiencing health benefits almost immediately. However, it will take much longer before you see a big payoff on your life insurance costs. Most life insurance company guidelines require you to be tobacco/nicotine free for at least 12 months before you qualify for non-tobacco rates. This same consideration can apply to e-cigarettes and life insurance. And it will take you 4-5 years before you’re eligible for the best rating classes.

Hazardous activities – Life insurance companies issue higher rates for people who engage in dangerous activities such as scuba diving, skydiving, racing, rock climbing, etc. Guidelines vary by company, but it’s standard for a company to look back two years when evaluating an application. So even if you jumped out of a plane for the last time a year ago, you could still get hit with higher rates today.

Weight lossOutlive your term life insurance policy controlling your weight. If you’re a few pounds above the threshold for a Preferred class for example, it could increase your cost by 20 percent or more. You may be able to shed a few pounds quickly and weigh in below the limit on your paramed exam (learn more about the paramed exam here: What to Expect From a Life Insurance Medical Exam). But more significant weight loss is going to take some time, especially if done in a healthy way.

Also, if you have a weight loss of 20 pounds or more over the past 12 months, many companies will add half the weight you lost back to your current weight. For example, say you went from a weight of 170 to 150 in the past year. The life insurance company may add 10 pounds back on to set your “insurance weight” at 160. The reasoning is that such sudden and dramatic weight loss is difficult to sustain and many people add weight back on over time. Fair? Probably not, but that’s the way they do it.

Three Moves that Will Provide Immediate Benefits

Determine your coverage need – Makes sense, right? You’d think so, but many people don’t take the time to calculate how much life insurance they need. Some come up with a number based on good research while others seemingly pull a number from thin air. Doing your homework here will prevent you from buying more than you need and spending more than you should.

Determine your term length – This goes hand-in-hand with the amount of coverage. Ask yourself how long you’ll likely need the coverage. Be careful not to buy a longer policy than you need. If your need is 10 – 15 years, there’s no reason to buy a 30-year policy. Yes, you can cancel the policy at any time without penalty, but you’ll overpay during the first 10 -15 years.

Find the best company – It’s easy to get an online term life insurance quote and simply pick the cheapest one you see. But be careful doing this if you have something that will prevent you from getting the best rating class, such as high blood pressure, multiple moving violations or family history of cancer.

You want to look for the company that has the most lenient guidelines for your situation. For example, if you had a parent die of cancer before age 60, many companies will give you a Standard rating class at best. However, there are a few companies with more lenient guidelines that may allow a Preferred rating class for the same history. The difference is significant and could save you more than 50 percent on your policy. Not sure which is best? Ask your agent or talk with the representative from the company you choose to apply with.

If you’re shopping for a life insurance policy today, spend the time to determine your needs and find the best company for your situation. You’ll save money from day one. And if you have health or other issues holding you back, making positive changes now will eventually translate into savings as well. It will just take a little more time.

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