Life insurance is a critical component of comprehensive financial planning, offering essential protection for individuals and families. However, it can also be a complex product, with various types and features (e.g. term life insurance, whole life insurance, no medical life insurance) that can impact both coverage and costs. Given its long-term nature, the savings accumulated from optimizing life insurance can amount to thousands of dollars over the years.
To shed light on this topic, we’ve consulted the respected expert Lorne Marr, who shares valuable insights into how to effectively manage life insurance expenses. In the following overview, we will explore twenty strategies to reduce life insurance premiums while maintaining a predetermined coverage amount and policy length, helping you achieve significant savings.
So let’s start…
| # | Topic | Explanation | Max. Potenial Savings |
| 1 | Your current physical health | Insurers offer lower premiums if you are in good health. A healthy BMI can significantly impact your rates. | Very High |
| 2 | Smoking habits | Stop smoking at least a year before applying for a policy to avoid higher premiums (up to 120%). Even occasional cigar smoking can impact your rates. The impact is higher on Term Life insurance policies than on Whole Life Insurance products. | Very High |
| 3 | Medically underwritten vs Guaranteed Life Insurance policy | If you’re in good health, opt for a policy that requires a medical exam to get better rates. | Very High |
| 4 | Age | Apply for your policy when you’re young to benefit from lower premiums. | High |
| 5 | Drinking habits | Avoid excessive drinking to keep premiums lower. Heavy drinkers may see an increase of up to 50%. Casual drinking (1-2 drinks weekly) though will not impact your rates. | High |
| 6 | Life Insurance type | Term Life insurance generally offers lower initial premiums compared to Whole Life or Universal Life policies. | High |
| 7 | Job Risk Factors | Avoid high-risk jobs (MMA fighters, bomb squad members, race car drivers), as they can lead to higher premiums. | High |
| 8 | Insurance riders | Evaluate additional riders on your policy and remove any that are unnecessary, such as accident death benefits. | Medium |
| 9 | Comparing Multiple Quotes | Get quotes from several insurers (e.g. via a life insurance broker) to find the best rates, as prices can somewhat vary. | Medium |
| 10 | Explore Return of Premiums Conditions | Some policies allow you to get back part of the premiums if you haven’t used them. Check with your broker to see if this is beneficial. | Medium |
| 11 | Improved Driving Record | If your driving record improves, review your premiums with your insurer for potential reductions. | Medium |
| 12 | Cancel Mortgage Insurance | If you have sufficient life insurance, consider canceling mortgage insurance to save money. | Medium |
| 13 | Don’t forget Group Life Insurance | Group Life Insurance from an employer can be a good opportunity to reduce life insurance coverage you buy through a personal insurance policy but remember it ends if you leave the company. | Medium |
| 14 | Regular Annual Review | Evaluate your policies and coverage every year, as new discounts might become available based on changes in your life situation. For example, as your child grows older, you may need to reserve fewer funds, or if you’ve fully paid off your mortgage, your coverage needs might decrease. | Medium |
| 15 | Policy backdating | Backdating your policy can lock in lower rates based on a younger age, potentially saving up to 10% on annual premiums. | Low |
| 16 | Bundle Policies for Savings | Combining life insurance with other policies like disability insurance or critical illness insurance can lead to lower premiums. | Low |
| 17 | Joint First-to-Die Policies | Consider a joint policy for you and your spouse, which is often cheaper than two individual policies. | Low |
| 18 | Annual vs. Monthly Payments | Paying annually can save you money compared to monthly payments, as insurers often offer discounts for fewer administrative costs. | Low |
| 19 | Membership and alumni discounts | Some insurers offer discounts if you’re a member of a professional organization, such as CPA. Graduates from certain universities might be eligible for discounts with some insurance providers. | Low |
| 20 | Policy Timing | Purchase your policy before you age up to save on premiums. For example, buy it while you’re still 29 if you turn 30 later in the year. | Low |
Some opportunities to save on life insurance are beyond your control and often relate to factors tied to your past or aspects of your life that you cannot influence. These factors might include your health history, family medical background, or certain lifestyle choices made earlier in life.
However, understanding these aspects can provide valuable insights into potential savings opportunities. Here is a quick rundown of how these uncontrollable elements can impact your life insurance premiums and what you might consider to manage them effectively.
| # | Topic | Explanation | Max. Potential Savings |
| 1 | Your Medical History | A clean medical record can help reduce premiums, but serious past health issues may lead to exclusions. | Very High |
| 2 | Your Family Medical History | A healthy family history can lower your premiums, while a history of serious diseases may significantly increase them. | Very High |
| 3 | Your gender | Female policyholders often pay about 25% less than males. Insurers typically consider the gender you were assigned at birth. | Medium |
| 4 | Safe Driving Rewards | A clean driving record helps lower premiums. A poor record can increase your rates by 25-50%. | Medium |
To get the best savings on life insurance, it is crucial to work with an independent broker who has access to policies from multiple providers. Our life insurance specialists can offer you a broader range of insurance solutions than most other brokers, allowing us to navigate through various options to find ways to reduce your costs effectively. By working with us, you benefit from our expertise in identifying and leveraging different strategies to lower your premiums.
To start, simply complete a life insurance quote on a sidebar for an initial, non-committal discussion, and let us help you explore the best opportunities for savings.
