How to Save Money on Term Life Insurance

By Contributing Writer

  • Overview

    Since most standard life insurance policies can be costly, many people choose term life insurance plans, which only cover a specific number of years--anywhere from 1 to 30 years--and are, therefore, cheaper to purchase. Due to the popularity of this type of insurance, there are many companies offering it to consumers. You still, however, want to make sure that you are getting the best rates and that you won't be tricked into overspending on a term life insurance policy. There are some things you can do to get the proper coverage without spending more money than you need to.

    • Step 1

      Get a free online insurance quote, where you can input your specific information and factors and see what the premium rates are from various insurance companies. Since getting a free insurance quote online doesn't obligate you to purchase anything, you can avoid being pressured into making a quick choice. Narrow your list down to the companies you feel offer the most affordable rates and contact them directly yourself instead of through a third party (see Resources below).

    • Step 2

      Make sure that you choose an insurance company that won't hike your rates due to your lifestyle. If, for example, you are overweight or a smoker, or you have a risky job or like to participate in extreme sports, you would be considered "high risk" by some insurers and would end up having to pay more for coverage. On the other hand, there are insurance companies who are more open-minded and that will not charge you as much for a term life insurance policy under those circumstances.

    • Step 3

      Choose the best policy for your age. If you are age 50 and older, getting a term length of 10 years would be wise, since any longer term would most likely be at a higher cost due to your age. If you are younger and in good health, then purchasing a term life insurance policy for a 20- or 30-year length would be feasible, since rates tend to be lower for younger consumers.

    • Step 4

      Look into level term life insurance coverage. The rates for this type of term life insurance cover anywhere from 10 to 30 years, and the rates do not change from year to year.

    • Step 5

      Contact the insurance company you are considering buying term life insurance from and find out if there are any special discounts available. For example, if you opt to pay your premiums on an annual basis instead of month-to-month, most insurers will lower your costs.

    • Step 6

      Give some thought to canceling a term life insurance program you are already involved in for a new term life insurance program if the rates will cost you less money. Make certain, though, that your replacement policy is in place before you walk out of your old one, to avoid lack of coverage.
    • Skill: Moderate
    • Tip: Never rush into making a commitment to an insurer until you examine the specifics of your policy.
    • Tip: Find out if the insurance company you are considering requires a medical exam in order for you to receive coverage.

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