Ways to Save Money on Life Insurance

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Contributor, Benzinga
February 16, 2022

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Once you make the final decision to purchase a life insurance policy, you’ll have to add the amount of the premium to your family budget. Since it will become a standard monthly or yearly expense, it is good to save as much money on the policy as possible. 

Benzinga has some excellent tips on how to save money on life insurance and all you need to know to find the right life insurance company for you. 

1. Review Insurers

Life insurance companies have different characteristics, and two things you should consider are their financial strength and customer service. 

You will likely get the most attractive rates from life insurance companies with high financial ratings, so it pays to check out the credit ratings online. 

The internet is also a great place to view online reviews from each insurer’s customers. Whichever company you choose, you will be able to get answers to your questions. 

A brief internet search on your top choices for life insurance will help you find which companies to consider and which to pass on. 

2. Shop Around

Life insurance is one of the most important assets you have. When you purchase anything of importance, it is best to shop around for the best value. 

Life insurance is a competitive market, and you have lots of companies to choose from. 

Research each company’s average premiums and make comparisons. It will not take long before you can start sorting out the characteristics that are most important to you to narrow down your list. 

Your final choices will give you the peace of mind in knowing the policy you choose is the right one. 

3. Group Insurance

A good place to start shopping for life insurance is with your employer because it may be able to give you an attractive group insurance rate. 

Depending on your plan, your employer may pay part of your life insurance premium on your behalf, or it may pay for it entirely. In many cases, employers will even use payroll deductions to pay for your premiums, so you will barely notice the payment. 

You will not have to take a medical exam to get a group life insurance policy through work, so it is a good option for people who have medical conditions that may disqualify them from other insurance plans. 

Even if you can get a group life insurance policy through your employer, you might still be able to get a lower premium through a different life insurance company. 

4. Watch Your Health

In most cases, you will get the lowest life insurance premiums when you maintain a healthy lifestyle. 

You may not be able to change certain genetic or medical conditions, but you can usually find ways to improve your health. 

Start by maintaining a healthy weight. Get regular exercise and eat a healthy diet. Pay attention to your blood pressure, glucose levels and cholesterol levels. 

Quitting smoking is better for your overall health, and it could get you an improved rate on your life insurance premiums. It is also best to limit drinking alcohol, as it can contribute to heart disease or other health risks. 

Overall, the healthier you are, the lower your life insurance premiums will be. 

5. Renewal Guarantees on Term Life

Term life insurance policies have an end date, and they can usually be renewed. Terms are usually 5, 10, 15 or 20 years, but they can be as short as one year. 

If you are in the market for a term life insurance policy, look for one that offers a guaranteed renewal provision. The benefit of this rider is you will not have to take a new medical exam or requalify for the policy if you choose to renew your policy.

Another thing to look for in a term life insurance policy is a return-of-premium (ROP) rider. This type of rider will give you a return of some of the premiums you paid on your term life policy if you do not die during the policy term.  

6. Don’t Be Afraid to Change Providers

Most people will tell you not to change your life insurance provider, and that may be good advice. However, as you build your assets over your lifetime, you may be better served by getting a new life insurance policy or an additional life insurance policy. 

For example, if you opted for a term life insurance policy, there is no way to grow cash value or get any of your premiums back. 

Depending on your needs, you may want to allow your term life insurance policy to expire and invest your money in a term life insurance policy with an insurance provider that offers a lower premium. Alternatively, you could replace your term life insurance policy with a whole life insurance policy that builds cash value and allows you to make loans against it.  

7. Return of Premium Policies

With an ROP rider, If you live longer than the term on your life insurance policy, the insurance provider will return a portion of the premium you paid during the life of the term. Be aware that the cost of ROP policies will be slightly higher than a standard term life insurance policy. 

If you are interested in getting money back on your life insurance, it might be best to weigh the pros and cons of ROP policies versus whole life insurance policies. You may be able to pay less for a whole life insurance policy and get more in the way of cash value. 

Whole Life

Whole life policies are popular because they build cash value and give you additional benefits along with the death benefit. 

Your cash value will build on its own, and it can gain even more if you invest additional dollars into your whole life insurance policy. You can withdraw the cash value at various times, and you can take out a loan on it and repay it later. 

Your premiums for a whole life insurance policy will be higher than a term life insurance policy, but your premiums will remain the same for your entire life, which means you could save on your premiums over your lifetime. 

Check Your Monthly Budget

Before you can decide on how much you can afford to invest in life insurance, it is a good idea to review your monthly budget. 

Your life insurance premiums are just as important as paying your mortgage on time or putting food on the table. 

Enough options for life insurance are available that almost everyone can find an insurance policy to fit their needs and budget. If the first few policies you look at are too expensive, keep shopping around until you find the right one.  

As your income grows, review your life insurance needs and your policy to decide if it is time to make a change.

Compare Life Insurance

To make the job of comparing life insurance policies easier, Benzinga offers insights and reviews of some of the best life insurance companies to guide your decision.

  • securely through Wysh Life Insurance's website
    securely through Wysh Life Insurance's website
    Best For:
    Those Under 50 Years Old
    Rating:
    Read Review
  • securely through Ladder Life Insurance's website
    securely through Ladder Life Insurance's website
    Best For:
    Adjustable coverage
    Rating:
    Read Review

    Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers – for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products. Coverage amounts vary by state.

  • securely through Haven Life Insurance's website
    securely through Haven Life Insurance's website
    Best For:
    Under Age 64
    Rating:
    Read Review

    Haven Term is a Term Life Insurance Policy (ICC21 Haven Term in certain states, including NC) issued by C.M. Life Insurance Company (C.M. Life), Enfield, CT 06082. In New York (DTC-NY) and California (DTC-CA), it is issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.

  • securely through Fabric Life Insurance's website
    securely through Fabric Life Insurance's website
    Best For:
    Young families
    Rating:
    Read Review
  • securely through Bestow Life Insurance's website
    securely through Bestow Life Insurance's website
    Best For:
    Term life insurance
    Rating:
    Read Review

    *excludes New York

  • securely through Sproutt Life's website
    securely through Sproutt Life's website
    Best For:
    People with healthy lifestyles
    Rating:
    Read Review

Life Insurance is Negotiable

Life insurance can be confusing if you are not familiar with it. These tips and strategies can help you to make the task of finding the right life insurance policy easy as can be. Life insurance is intended to serve you for all or most of your lifetime, so spend some time learning about it and exploring companies and policies. 

Frequently Asked Questions

Q

What is a good amount to pay for life insurance?

A

The right amount is whatever amount you can afford that offers you enough life insurance to protect your family in the event of your death. Your needs and budget will likely change over various seasons of life, so it is wise to reevaluate your life insurance needs every year and make adjustments in your life insurance policy as needed. 

Q

Is $250,000 of life insurance enough?

A

In most cases, more life insurance is better than less life insurance. When considering the amount of death benefit, $250,000 is more than some people need, and it is not enough for others. How much life insurance you need depends on several things including how much debt you will leave behind if you pass away, how comfortable your family will be without your income and how much you can afford to pay in premiums.

Methodology

Benzinga crafted a specific methodology to rank life insurance. To see a comprehensive breakdown of our methodology, please visit our Life Insurance Methodology page.