Life insurance premiums can be pretty expensive even though they’re one of the most worthwhile investments you can make for the future of your family. Luckily, LSM is sharing the tricks of the trade, which will allow you to still protect your family without sending yourself to the poorhouse.
The following are six ways you and your family can save thousands of dollars when buying a life insurance policy:
1. Pay Annually – Most people who buy life insurance pay on a monthly basis. But if you can swing it in your budget, paying your policy annually could save you thousands of dollars in premiums over the life of the policy. Take a look at the following example:
A 50-year-old man applying for $1 million of Term 10 coverage would pay $135.18 a month. Multiplying that figure by 12 monthly premiums, and it comes out to $1,622.16 a year, or $16,221.16 over ten years.
By paying annually, the same person would pay $1,502 a year, or $15,020 over 10 years. He would save $1,201.16 over that ten-year period by paying annually.
2. Look for Multi-life Policies – If two spouses are looking into a life insurance policy, they should look for a company that offers multi-life policies. Each life insurance company charges a policy fee on its applications and having a multi-life policy voids the charge for the second insured person.
3. Look for Preferred Rates – If you’re healthy, look for a company that offers preferred rates.
Preferred rates are given to individuals who are in very good health and have very good family health history. The savings could be up to 35 per cent above standard rate policies.
4. Use an Independent Broker – Term and Permanent life insurance premiums can vary significantly from one company to another. Independent brokers work with a multitude of life insurance companies and can get you the best deal possible.
5. Don’t Buy a Simplified Issue or Guaranteed Issue Policy If You’re Healthy – Simplified issue policies are available without a medical test and have three to twelve health questions, but Guaranteed Issue policies have no health questions and no medical tests. These policies can be a good option for people in poor health. However, if the person is in good health, she should look for a traditional life insurance policy at a much lower premium than she can get with a guaranteed or simplified issue policy.
6. If Your Existing Term Policy is Up for Renewal, Shop for a Lower Rate – Term policies build in a pricing buffer at the policy renewal. Prior to your renewal, shop for a lower rate. It’s always a good idea to look into this at least a few months prior to the renewal, as it will take some time to get the new coverage approved. One very important caveat is to make sure not to cancel the existing term policy before the new plan is approved and in-force.
For more information on life insurance in Canada, please call 1866-899-4949 or visit our Term Life Insurance Instant Quote Page.
Thanks for sharing your opinion. It is possible to make some lifestyle changes to improve the probability of qualifying for preferred rates.
Hi LSM. This I’d a great article with tips to save on life insurance. I agree with ask your points. The one that is not within the clients control, really, is whether or not they qualify for preferred rates. Working with a skilled broker will increase one’s chance of getting preferred rates because they will help choose the best insurance company for the client.
Thanks again.
Thanks for the note. Yes how Preferred rates work and their availability is often overlooked.
This article https://lsminsurance.ca/life-insurance-canada/2009/08/understanding-preferred offers an expanded look at the issue.
I liked and will prefer the 2nd and 3rd points, the other points are well explained. I also read something new about Multi-life Policies, pricing buffer at the policy renewal. As a starter to learn about getting insured and the problems involved in having a perfect life insurance its informative.