When it comes to getting the best life insurance rates, it’s important to understand that insurance rates depend a lot on your age, your overall health, and the type of policy you buy. If you’re in excellent health or younger than the average policyholder, you’ll generally qualify for the best life insurance rates possible. Meanwhile, if you’re older or suffer from an existing medical condition, that can drive up the cost of your policy in a hurry.
Life insurance carriers rely on different data sets to price their policies, which is why it’s crucial to shop around with different brands before buying a policy you’ll have for 20 or 30 years – or even your entire lifetime. By shopping around, you’ll learn the average cost of a policy for someone of your age and health – and get that much closer to finding the best life insurance rates for your situation.
The best way to compare life insurance rates is by using an online marketplace tool like the one below. Simply enter your ZIP code below to get several quotes for policies in your area.
Find the Best Life Insurance
The Guide to Getting the Best Life Insurance Rates
- Learn about the types of life insurance you can buy
- Find out which factors affect life insurance rates the most
- Learn what to expect when you apply for a policy
- Figure out the best ways to keep your life insurance rates as low as possible
Once you’ve entered your information and secured an online quote, continue reading to learn more about the types of life insurance available, the application process, and steps you can take to get the best rates possible.
Types of Life Insurance
You’re probably looking to buy life insurance to protect your family from wage loss due your death, so it’s important to carefully consider the different types of policies available before making a final decision. Although unique policies with various riders and “extras” are written all the time, most life insurance policies fall into one of these main categories:
Term Life Insurance: True to its name, “term” life insurance is only in force for a specific period of time — a “term” that begins when a policy is purchased. Most term policies are active for a period of 10 to 30 years, a time in which no cash value accrues.
Families who purchase term life insurance policies will pay premiums for the duration of their policy and remain covered while it’s in force. Like other forms of insurance, if you don’t need to file a claim during the coverage term — which in this case means you didn’t die, a good thing! — a term life insurance policy doesn’t pay out any benefits.
Term policies are generally purchased by people who want low-cost policies that will cover them during their working and earning years.
Whole Life Insurance: Unlike term life insurance, whole life is meant to be in force for the remainder the insured person’s lifetime. Covered persons or their families pay a premium to start the policy which will remain in effect until they die or cancel the policy for any reason. Whole life policies accrue monetary value that can be cashed out or borrowed against, and guarantee a premium for the policyholder’s entire lifetime.
Whole life policies are more expensive than term life, and are commonly purchased by individuals with large estates or those who simply want life insurance coverage for life.
Guarantee Universal Life: According to Genworth Financial, guarantee universal life policies provide a death benefit while building cash value customers can borrow against. Unlike term and whole life insurance, which offer fixed premiums, guarantee universal life policies allow you to vary the amount and timing of your premiums – and even the death benefit – based on your individual circumstances.
These policies are most commonly purchased by people who expect their incomes to fluctuate dramatically over time, yet want to keep a lifetime insurance policy in place no matter their circumstances.
Index Universal Life: Much like guarantee universal life, index universal life builds cash value and provides a lifetime death benefit. However, IUL policies are different because they link the growth of the policy’s cash value to changes in one or more of the widely-followed financial indices, such as the S&P 500, Nasdaq-100, or the Dow Jones Industrial Average.
Like whole life and guarantee universal life, these policies are typically purchased by individuals who want a lifetime death benefit and a policy that builds cash value over time.
What Factors Affect Life Insurance Rates?
Life insurance rates can vary dramatically based on personal health, the age of the policyholder, and personal behavior – both good and bad. The following factors play the biggest role in how life insurance carriers price their policies:
Your age is a crucial variable for life insurance carriers pricing a policy, and that’s true no matter which type of life insurance you buy. The older you are, the higher risk you pose to the insurer. Therefore, older consumers tend to pay higher life insurance rates over time.
Your health history is another big consideration for insurers that write life insurance policies. If you have a history of health problems, a recurring medical condition, or a chronic disease, insurers are more likely to decide that you pose too great a risk – or charge much higher life insurance rates to mitigate that risk.
Your weight is another factor that life insurers consider. If you’re overweight, you’re significantly more susceptible to lifestyle illnesses such as strained joints or Type 2 Diabetes. These issues make you tougher to insure, and could lead to higher premiums.
Your current health is just as important as your health history. If you had health issues in the past but solved them on your own, you’ll be in a better position to secure affordable life insurance rates on a policy that meets your needs.
Your gender matters more than you think when it comes to life insurance. Since women tend to live longer, healthier lives, they tend to pay lower life insurance rates on all policies across the board.
Your lifestyle also matters when you’re ready to purchase a life insurance policy. If you drink or smoke, for example, you’ll pay much higher rates than if you abstain. Lifestyle factors that negatively impact your health — particularly smoking — make you a greater risk to insurers.
Your occupation plays a role in life insurance rates as well. If you work in a dangerous field where your life and health are constantly at risk, you’ll generally pay higher premiums on any type of policy you buy.
Your policy matters, too. Term life insurance is generally less expensive than whole life or universal life policies. The type – and length – of policy you choose will play a role in how much you’ll pay over time.
Your policy amount – or, how much life insurance you actually buy – will play a huge role in your monthly life insurance premiums. The higher your coverage amount, the more you’ll need to pay each month or year to keep it up-to-date.
Applying for Life Insurance: What to Expect
Once you decide which type of life insurance is best for your situation, you’ll need to decide how much coverage to buy. Meanwhile, you’ll also need to make a decision on who to name as the beneficiary on your policy.
To apply for a life insurance policy, you’ll need to fill out a formal application. Not only will you need to list your name, age, and employer, but you’ll also need to provide accurate details regarding your overall health and lifestyle. Most life insurance applications will ask the following questions:
- Date of birth
- Lifestyle details, such as whether you smoke or drink
- Financial information, including your income
- Net worth
Most life insurance carriers require applicants to undergo a full medical examination before a life insurance policy can be put in place. This exam is administered to verify the information you provided in your application, and also to determine if any additional tests are required.
This part of the application typically requires a trip to a local clinic or insurance office, although some life insurance companies will send a medical professional to your home to conduct the examination. Most of the time, the paramedical assigned to your case will:
- Verify your medical history by reviewing the medical history you submitted on your application and ask for additional details, if required.
- Take your blood pressure to ensure it is within normal limits.
- Listen to your heartbeat, and check for abnormalities.
- Verify your height and weight with a scale and measure.
- Check bodily fluids, including drawing blood and collecting a urine sample.
- Ask about lifestyle factors that could put your health at risk, such as drinking, smoking, or occupational hazards.
Depending on your health, you may be subject to additional tests which could include X-rays, physical fitness tests, additional blood work, or an EKG. Either way, your case will head off to an insurance underwriter – an insurance professional assigned to study your case and determine your risk.
While you await a decision, the underwriter assigned to your case will:
- Examine your application to check for accuracy and truth.
- Receive lab results and mark them in your application.
- Order medical records from your family doctor, if needed.
- Ask physicians and doctors to examine your records and inquire about potential risks.
- Determine what level of risk you pose to the insurer, and make a recommendation based on research data.
Since applying for life insurance is a complex endeavor, it shouldn’t surprise you that approval doesn’t happen overnight. Most of the time, it will take 2-3 weeks for an underwriter to thoroughly examine your application and medical details and recommend you for denial or approval.
If you’re denied for any reason, you can always reapply later when your circumstances change. Furthermore, life insurance rates tend to drop considerably once you reach a certain level of health.
Some large employers, alumni networks, credit unions, and other organizations may offer employees or members the option to buy group life insurance, often without a medical exam. And some life insurance companies also offer policies that don’t require a medical screening. However, these policies generally cost more since they require more risk on the part of the insurer. Before you purchase a policy with a “no medical screening” option, shop around and see just how much more you’ll pay.
How to Keep Life Insurance Rates as Low as Possible
If you want to secure the best life insurance rates possible, you’ll need to prove that you’re in optimum health. Unfortunately, that can be a tough road to climb if you have bad lifestyle habits or a medical condition that scares off insurers.
While the total picture of your health may not be in your control, there are plenty of ways to improve your chances for approval and affordable life insurance rates. Here’s what you should do.
Stop smoking – once and for all.
Taking part in a smoking cessation program or quitting cold turkey are your best options if you want to improve your health over time (to say nothing of the money you’ll save). To qualify for the best life insurance rates, you’ll generally need to have been smoke-free for at least two years.
Drink alcohol less often.
If your life insurance carrier sees you drink alcohol fairly often, you may pay higher life insurance rates as a consequence. Conversely, drinking less often can help you qualify for lower life insurance rates and a policy with more generous terms.
Being overweight can lead to a slew of costly medical conditions, some of which may contribute to early death. Insurers know this and price life insurance policies accordingly. If you want to save money on life insurance premiums, losing weight will help.
Eliminate risky behavior.
Insurers may charge higher rates if you work in a dangerous profession or have a poor driving record. Changing your behavior so you present a lower risk is one way to keep insurance rates as low as possible.
Consider term life insurance.
Since whole life provides coverage for your entire lifetime, whole life insurance rates are generally more expensive. Term life insurance is almost always a less expensive proposition, and worth considering if your goal is to save money while still protecting your family from lost income if you were to die during your prime earning years.
Just like anything else, it’s important to shop around for life insurance rates. If you’re paying too much, switching insurers and perhaps types of coverage could help you save. Using an online life insurance quote tool is the quickest way to get quotes from several reputable insurers at one time – and without even leaving your home.
Ask about discounts.
Depending on the provider, you may be able to secure a discount for paying your annual premium upfront or choosing to receive your statements online. Either way, asking your insurer about discounts is the best way to find out if any are available.
Avoid riders and additional insurance.
Riders are a-la-carte options you can purchase to improve the value of your policy upon your death. Riders are offered to cover numerous circumstances, and they almost always cost more money. If the purpose of your life insurance policy is simply to provide for your family in the event of your death, these add-ons may not be necessary.
If you have homeowner’s insurance, auto insurance, or any other type of policy with another company, it makes sense to see if they also offer life insurance. By bundling policies with the same insurer, you could score deep discounts on all types of insurance your life requires.
Start shopping now.
No matter your health, life insurance rates increase as you age. The best way to save money – whether you’re buying term life insurance or some variation of whole life – is to start shopping now.
The Bottom Line
Buying a life insurance policy is the best way to protect your family from catastrophic financial losses that may result from your death. With the right type of coverage, you’ll be able to protect and provide for them as if you had never left.
The best way to secure this coverage is to start shopping now. Explore the different types of life insurance that are available in your area and search for a policy that suits your needs.
No matter which type of policy you choose, you should never underestimate the power of shopping around. The best life insurance rates can only be yours if you take the time to find the best – and most affordable – policy to fit your lifestyle. To start exploring your options, enter your information into the rate tool below.