Americans, with the help of the internet and its ability to compare prices for every type of purchase, have quickly become experts in purchasing for value. No one likes to overpay, especially for life insurance.
So, how do you know if you’re getting the cheapest life insurance you can?
Consumers are smart. They understand there are ways to shop for everything and save money in doing so.
Shopping online for retail products to cars, magazines to vacations. Review sites, coupon sites, and directories all across the web give everyone immediate access to know who will offer what price, for how much in shipping, delivered to their door by what date.
Although there are no coupons, shopping for cheap term life is just as easy.
Finding The Best, Cheap Term Life Insurance Policy
If you’re in the hunt for a brand new television, how much time would you spend to be certain you not only got a high-quality TV but at a great price with a great warranty or satisfaction guarantee?
Most people would first start looking at a range of sizes, brands, and types until they found something they really wanted. Next, scanning the web for product reviews and recommendations, there would likely be a few which dropped off the list, and others which seemed more appropriate. Once the list of possible purchases is narrowed down, a smart consumer would look for excellent deals, both locally and nationally, seek out coupons and even look for possible opportunities to buy on tax-free dates or shopping holidays like Black Friday to get the most of their budget.
This process of buying is not too far from how you might buy life insurance.
Affordable term life insurance is the most sought-after type of life insurance policy because it enables the insured to get the maximum amount of death benefit for the least price. While not everyone is approved, those who qualify for the best rates are the healthiest and pose the least risk to the insurance company they applied to.
Here are the main factors considered for the cheapest individuals:
- Clean Medical History
- Clean Driving Record
- Limited or No Family History
- Free From Risky Occupations
- Free From Risky Activity
Any fault from one of these categories might quickly drop you from the very best life insurance rates down to standard or worse, depending on the event(s). In fact, less than a quarter of all applicants for life insurance will be eligible for discounted rates, with another quarter getting below standard.
Even the healthiest person with a perfect driving record could be ineligible for the cheapest life insurance rates because of something like family history, which is completely out of their control.
So, what exactly is meant by having a clean medical history?
Everyone gets sick at some point; most people have allergies, migraines, and a few extra pounds they’d like to shed before the next summer season rolls around. In today’s society, every other person takes some sort of medication, too, whether it be for high blood pressure, hypothyroidism or even ADHD. It wouldn’t be fair for all of these to immediately remove an applicant from the best rates because they may not affect life expectancy one bit.
Medical history, in the sense of speaking about life insurance, is looking at what possible chronic, debilitating, or life-threatening conditions a person may have. The most common are:
While that’s nowhere near a complete list, these are serious things for any insurer to consider. There are many more from simple arthritis to complex cases of Multiple Sclerosis (MS), liver disorders to brain tumors. Each is considered on an individual basis, usually underwritten differently from one carrier to the next.
Other factors are age of diagnosis, severity, level of control, types of treatments or medications which are being utilized, and the possibility of a person having more than one condition.
But just because a person can’t get a rating like preferred plus, there are still ways to buy cheap life insurance depending on which carrier you use. Anyone who is considered high risk based on health alone should understand that patience and working with a very experienced agent could save thousands, so do your research and take your time as best you can.
Yes, your driving record is taken into account for your life insurance. It’s not like auto insurance where you will have rises in premium for an at fault accident, but there are infractions an underwriter must consider which could impact the longevity of life.
A person who has a speeding ticket or two will pass this check with flying colors. A person who has a DUI/DWI can expect much less leniency. Consider this: if a person drives drunk or under the influence of drugs, they pose a serious threat to themselves and others, and fatal accidents are much more probable for them than from someone who abstains from these activities.
A single DUI, depending on when it happened, can still make a person eligible for very cheap life insurance rates. However, having more than one could lead to a flat extra fee, a costly premium increase for every thousand in coverage you’re seeking to buy. It might also mean a decline.
Before you start grabbing your family tree and making a list of every health hazard that has ever passed through your lineage, understand that only your most immediate family matters. This means biological mother and father, brothers and sisters.
Even then, particular illnesses or conditions are of greatest concern. Heart health, diabetes, and cancer are most commonly asked about, but other companies may be more specific with a longer list of concerns. If you find yourself answering “Yes” to one of these conditions, additional information will be required to evaluate if it will have an effect or not.
For example, if you answered to having some type of heart disease in your family, here are some questions you might additionally be asked:
- What type of heart disease?
- What was the age of onset?
- Is this person still living?
- Did this person use tobacco?
Let’s say your mother had a heart attack after she was 70 years old, and she is still living. This wouldn’t have any impact on your rates, and the cheapest discounts would still be available.
However, if the exact same was the case but she was 50 years old when it happened, you’d be bumped down to preferred instead of preferred plus. If she had the heart attack at 50 and did not survive, you’d be bumped down yet another tier. As you can see, there are still many more factors with family history.
While most don’t consider their occupation dangerous, there are a few which could have potentially life-threatening requirements. Consider a driver for NASCAR. They’re typical job is racing a vehicle with forty others at three times the speed most of us normally go in the fast lane on the freeway.
A life insurance is a lot less likely to award them cheap term life insurance when compared to a person whose day job is data entry for a Fortune 500 company.
Pilots, police officers, firemen, salvage divers, deep-sea fisherman, military personnel and more would all be required to fill out additional questionnaires in order to clarify how risky their day to day duties really are.
In addition, a person who partakes in risky activities would be subject to similar criteria. Skydivers, scuba divers, hang gliders, motorcycle riders, and others who enjoy the occasional adrenaline rush or hazardous activity may or may not see additional premium added to their base premium.
Proper licensing, safety equipment and other credentials are necessary to satisfy the underwriter to assure them you are still a minimal risk.
Cheap Term Life Insurance Has A Process
Not all companies have the same cheap life insurance rates, and there are hundreds of possible places to find a policy. So, how does one go about making sure they’re getting the best possible rates from the best life insurance company available to them?
Assuming you can satisfy all the different risk elements listed above, what is the most efficient process of getting quotes for the cheapest term life insurance policies?
Using an independent agent, one who is not tied to any one particular insurance company is your best bet. They have the software and the relationships to scan through more than 50 or 60 companies at a time and sort the offers by lowest premium.
It’s important to take this step because while one company might be perfectly suitable for one person, another person with just slight differences might have a completely different set of offers available to them from different carriers. An experienced agent will also walk you through some questions to clarify all the risk elements to be positive you’re being paired with the most appropriate company.
For example, let’s say you answered “Yes” to using tobacco, but only because you had a cigar a few months back at a golf outing. If your agent didn’t clarify, you’d be quoted as a smoker when you’re fully capable of top-tier rates for non-smokers still.
It’s critical to find an agent who asks plenty of questions because choosing the best carrier the first time can save you headaches, time, and money.
Here are a few more tips to obtain cheap life insurance:
- A medical exam will likely yield you lower rates
- Annual payments are the cheapest way to pay your premiums
- Apply before your half birthday (or nearest birthday) to avoid age rate increases
- Ask for a reconsideration as much as annually if your situation changes
- Don’t fall for ‘bundling’ tactics from insurance companies
As with any purchase, do your homework and go with your gut. If it doesn’t feel right, keep asking questions of your agent or continue shopping around until you are confident you’ve got the best people working for you.