How to Save Money On Term Life Insurance

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Term Life Insurance is a great buy. Nowhere else can you create hundreds of thousands or millions of dollars in death benefit protection for literally pennies on the dollar. Prices for Term Life insurance are still at all-time lows, and now is a good time to lock in these lower prices. Here are several ideas that may help you save money when buying term life insurance:

Lock In Guaranteed Rates As Soon as Possible. Pricing is based on age and although your financial needs may be lower at a younger age, the rates are also substantially cheaper the younger you are. The goal is to protect your primary assets (like your salary and house) so that if something were to happen to you, your beneficiaries would be able to meet their financial needs. The best approach is to review protection needs often and lock in as much protection as may be needed while your health is good and prices are low.

When is your birthday? While some companies set their prices based on your actual age, most companies increase the price of their term life insurance policies six months before your birthday. It’s a pricing method called “Age Nearest Birthday” in the insurance industry, and that unexpected price increase could add up over a 20-year or 30 -year term insurance policy.

Act before health issues increase your costs . Healthy people have the lowest mortality risks and thus are much cheaper for companies to insure. This translates into lower rates for the “Super Preferred” and "Preferred" customers than someone with higher risk factors such as a heart condition, cancer or diabetes. However, if you were unhealthy when you acquired your life insurance policy, and your health has now improved with conditions controlled, it might be a good time to consider a new policy, because your rates are likely to be lower.

Buy the right length of coverage. Everyone has different needs and circumstances. While it may make sense for people in their 20's, 30's and 40's to buy a 20-year or 30 -year guaranteed term policy, a 10-year term might be more appropriate for someone closer retirement. Just remember that at the end of your guaranteed period, costs could increase dramatically.

Check for pricing breaks. Companies often offer "volume price breaks" at certain coverage amounts (for example. $250,000 vs. $230,000). In some cases people can actually pay less money for more coverage due to volume discounting. Check how much or little your prices increase when you increase your life insurance coverage amount to the common price breaks of $250,000, $500,000, or $1,000,000.

Each company sets prices based on their historical and expected mortality experience. Every company looks at avocations, tobacco use and other risk factors differently and some are more liberal in specific areas than others. Be sure you compare a number of companies term insurance rates and find the insurance company that matches your personal and medical profile with their unique underwriting criteria.

Check your payment/billing options. Compare annual, semiannual, quarterly and monthly bank draft pricing. Most life insurance companies offer discounts to consumers who pay their premiums annually, or who pay their premiums monthly by automatic electronic funds transfer (EFT/band draft).

Review your policy and rates often. The internet makes it easy to review your term life insurance policy annually. Rates may be lower, and your health or financial circumstances may have changed, requiring more or less protection. If you are considering replacing a policy, make sure you allow enough time to get your new policy in place so coverage's won’t overlap or lapse.