How to lower your life insurance premium

If you have people depending on you financially, life insurance is a must. Yet many people struggle to take the leap because they’re afraid they can’t afford it.

In reality, life insurance policies are much more affordable than most people think. But that doesn’t mean you should leave money on the table.

What can you do to lower life insurance premiums?

Life insurance premiums are what you pay to keep your policy going. If you die while the policy is active, your loved ones receive a cash payout to use however they wish. It’s an investment in you and your family’s future – one that you want to be smart about, so you don’t end up paying more for coverage than you need.

To help you make better choices when considering life insurance quotes, here are some ideas to help you save even more on your premiums.

Buy insurance at a young age

It pays to buy life insurance early. Age is one of the biggest factors carriers look at when you’re buying life insurance, along with your health. When you’re young and healthy, you tend to be a lower risk to insurers, which means you’re more likely to get a better rate.

Premium costs go up as you get older, so the sooner you buy coverage, the better. Once you have a rate, there are policies where it’s locked in for the entire length of the policy, saving you money down the road.

Maintain a healthy lifestyle

Another great way to lower your insurance quote is to take a close look at your lifestyle and habits. If you’re living an active, healthy lifestyle, you’re more likely to pass a medical exam with flying colors and secure a lower rate. On the other hand, habits like smoking, drinking, and recreational drugs can have a serious impact on how much you’ll pay.

Making positive changes isn’t just good for your health, it’s also good for your finances. For example, quitting smoking and staying nicotine-free for a year can help you qualify for lower non-smoker rates. Losing weight and keeping it off can also help improve your cholesterol and blood pressure readings, which can lower your premiums.

Insurance companies will also look at your driving record, occupation, and any adventurous hobbies, like skydiving or mountain climbing. All of these play a part in determining your eligibility for coverage and insurance costs.

Opt out of extra features

When you apply for a policy, your life insurance agent may suggest life insurance riders to enhance your coverage. Riders are optional additions to your life insurance policy that provide more benefits or protection. They can do things like pay your family a lump sum if you die in an accident, combat inflation, or let you withdraw a portion of your payout early if you are diagnosed with a terminal illness.

While all these additional benefits may sound great, many riders come with an additional cost. Take a close look at each rider and ask yourself if the additional protection is worth it for your family.

Consider term life insurance

Term life insurance is a budget-friendly type of coverage that you can customize based on your needs. This flexible insurance covers you for a set period of time, typically between 10 and 30 years, and you can choose the policy term length and coverage amount that works best for you.

Because term life doesn’t last your entire life like permanent insurance, it’s typically more affordable than most other kinds of coverage. This makes it a popular choice for families and people who don’t need a lifelong insurance commitment.

Choose the best term length

You can typically buy a term life insurance policy that lasts 10, 15, 20, or 30 years. Your best choice will depend on your unique situation and needs.

Take a moment to consider:

  • Any remaining debts
  • How many people depend on you financially
  • How long you have until you retire
  • What you can afford based on your income, expenses, and assets

Longer term lengths tend to cost more but may be more cost-effective if you’re supporting a family, just starting out in life, or have just bought a house. If you’re older, with fewer debts and financial responsibilities, a shorter-term policy can protect you at a lower rate.

Pay your premiums on time

Making late premium payments can come with added costs, especially if you don’t want to lose your policy. If you stop paying your premiums, your policy could lapse, ending your coverage and preventing your beneficiaries from receiving a death benefit if you die.

Life insurance providers typically have a grace period of around 30 days after the premium payment is due to give you some extra time, but you may still incur a late fee. To avoid late fees or losing your coverage altogether, consider enrolling in an autopay plan so you can ensure premiums are paid on time.

Pick the best payment schedule

Most providers offer a few options for payment:

  • Monthly. Easily the most popular premium payment option, this involves making smaller payments each month to maintain your policy.
  • Quarterly or semi-annual. With this option, you make fewer payments several times a year. But having to pay more without any potential discounts makes this a less ideal option for many.
  • Annual. Like it sounds, annual premiums involve a single payment per year. Providers will often offer a discount for customers who choose this option, sometimes up to 5%.

Annual payments are generally cheaper, but monthly payments could work better for your budget. Consider which payment schedule would be most convenient for you and help you save over time.

Don’t let your concerns about life insurance costs stop you from protecting your loved ones. At Fidelity Life, we’re dedicated to making life insurance accessible to all, with a range of policies for every budget.

Get in touch to speak with one of our agents or start your online quote today.