Most people that are shopping for a particular product or service take the most simple and easy path. If you are planning on applying for cheap term life insurance with the lowest rates and you want to eliminate the confusion and excessive time consumption of jumping from one life insurance website to another, I will show you in this article how to very easily accomplish this. As a rule, the more websites a person visits, the more they get confused.
This should never be the case but unfortunately this ends up happening to most people. We have designed a system where you can roll up your shirtsleeves so you may get to work and find out what you need to know and apply in a smooth and quick step by step process. Many people get so confused they end up hitting the brakes and giving up on the whole idea of purchasing their much-needed life insurance to protect their families from financial hard times.
Here is a list of four of the most valuable concepts about life insurance you need to know.
- Life insurance rates are regulated by law for your protection as a consumer. This means nobody can sell the same product for less or more money, period!
- Life insurance companies vary in underwriting criteria. This means one life insurance company looks at the given information on an application differently than other.
- Rates vary from one company to another. This is why rate comparisons from one carrier to another is so important. We represent over 40 trusted life insurance companies.
- It is vital to use the correct company for an applicant’s specific health history and lifestyle. Each company has a different perspective to information such as tobacco use, height & weight, health conditions and hazardous occupations and sports.
These four concepts have a direct impact on Term life insurance quotes. I wanted you to understand these facts right from the beginning. They are that important.
The first step is to contact an experienced life insurance agent to help you.
You will need to converse with you agent and go over the specific information that could raise any red flags on your application. This is the time to lay your cards on the table and brief your agent in so he knows how to handle your medical history or anything else that could cause a complication on your application. Keep in mind the life insurance companies do a thorough job collecting all the information they need. Here are some examples of information that could throw up a red flag.
- Your health history as far as medical conditions along with height and weight.
- If you have a dangerous job such as an Iron Worker, a Commercial Diver or a Logger etc.
- If you are active in dangerous sports such as Drag Racing, Sky Diving, Scuba Diving etc.
- You driving record pertaining to DWI/DUI, multiple speeding tickets and reckless driving charges among others.
- Your parent’s health history in reference to Cancer and Heart disease which could be passed down through genes.
Life insurance applications require a medical exam unless you apply for a Non-Med Policy. The Non-Med policies are fine but they are more expensive that a fully underwritten policy. Going over your health history and lifestyle is very simple and only takes a matter of a few minutes.
Choosing the type of life insurance is another simple process where you inform your agent of what the life insurance is going to be used for and for how long you will actually need the life insurance to continue. If you are looking for cheap life insurance, affordable Term life insurance will always have the lowest premium but they should be considered a temporary policy because Term insurance is purchased by term lengths of 5 to 30 years.
Begin your search for cheap Term life insurance as soon as possible.
The longer you wait the older you get and when shopping for life insurance, waiting will cost you money. The rates go up for every year you get older. When you do apply for a plan and you are improved, your rates are guaranteed for the full-term period. Most people procrastinate and put off buying life insurance and then when they do decide to apply they find out the rates are much higher that when they first started shopping for life insurance.
On top of that, as you get older health conditions start to enter the picture and then that is what could cause much higher rates of find you have become uninsurable. The most common medical conditions are high blood pressure, high cholesterol, Diabetes and heart and respiratory conditions. This is the biggest negative side effect of people wanting to buy life insurance. When you hear a life insurance agent say “buy your life insurance as soon as possible” he is giving you valuable advice, take it.
Your height and weight is very important when applying for cheap Term life insurance.
The companies go by a mass index chart which shows the minimum and maximum weight for a male or females height and weight, specifications. This is just as important as any medical problems that an individual could have. People can be declined for being overweight if their weight exceeds the maximum weight on the build chart. If the person in question is not declined they could be charged an extra percentage above and beyond the base premium.
You will always be able to get the best Term life insurance quotes if your height and weight are within acceptable specs.
Smoking and chewing tobacco products are very costly when it comes to purchasing life insurance.
Tobacco rates can easily drive your premiums over 200% or more.
People sometimes they cannot move forward applying for life insurance because of the tobacco rates driving up the cost. Some companies are more forgiving when it comes to tobacco users but the premiums will still be higher. Don’t be fooled by the thought of an occasional cigarette or cigar because the tobacco residue stays in your body for several months. Chewing tobacco will easily show up as nicotine in your system even if you don’t smoke.
Dangerous activities and sports will also have a major concern to the underwriters.
Many applicants do not realize that their favorite sport or hobby and stand in the way from receiving cheap Term life insurance rates and quotes. Sports and hobbies such as Drag Racing, Stock Car Racing, Motorcycle Racing, Boat Racing, Sky Diving, Rock Climbing, Scuba Diving, Hang Gliding, Bungee Cord Diving and flying your own airplane are perfect examples of sports that can increase the cost of your life insurance premiums.
Life insurance companies spend millions of dollars every year having statistics calculated to better determine how to set their rates especially for hazardous sports and occupations.
Your policy face amount (death benefit) is going to take some planning for the future.
Your chosen face amount is going to be one of your most important decisions when applying for cheap Term life insurance. Being over insured will increase your premium. Being under insured will not provide your dependents with enough funds to be able to pay their expenses properly and cause financial issues. Sit down and consider your income and financial liabilities so you and your agent can calculate an accurate face amount to use.
Many times, your budget will be the most important factor when choosing how much life insurance to apply for. Only buy what you can comfortably afford so your life insurance premium does not become a financial burden.
The worst problem you can have is being forced to cancel your life insurance because you cannot afford it anymore. The choice of your face amount and policy premium will require a lot of thought on your part due to the fact you know more about your income and expenses that your agent ever will.
Draw up a list of all your day to day expenses and the grand total of income you receive.
The whole purpose of purchasing Term life insurance is replace your income if you meet your demise. If something happens to you, the life insurance will replace your income so your family members can live their life normally without having to make drastic cuts in their lifestyle. A family without a life insurance payout could have to change their home and to move into a less expensive residence which would be a traumatic experience especially after they lose their father or husband suddenly. The idea of going to college could very easily go up in a puff of smoke changing your children’s lives forever.
Here are just some examples of what the cost of cheap Term life insurance really is.
We will use an example of a 30-year-old male with a face amount of $250,000 and a 20-year term period with a preferred non-smokers rate classification. I would have to say that these rates will definitely meet the definition of cheap Term life insurance.
Transamerica – $16.56 per month
Protective Life – $16.71 per month
Lincoln National – $16.85 per month
Banner Life – $16.97 per month
American General – $17.00 per month
United of Omaha – $17.94 per month
North American – $18.04 per month
Principal National – $18.07 per month
SBLI – $18.49 per month
Fidelity Life – (No Exam) $19.14 per month
Fidelity Life – $19.14 per month
John Hancock – $19.95 per month
Nationwide – $20.47 per month
Minnesota Life – $21.56 per month
AXA Equitable – $22.89 per month
Prudential – $26.55 per month
Assurity – (No Exam) $42.85 per month
As you can see with this rate comparison Term life insurance can be a cheap form of life insurance. When other variables enter the picture such as health conditions, a history of Cancer or Heart Disease in your family tree, obesity, dangerous occupations and sports, the rates can definitely go up. You can help your situations by:
- Staying physically fit
- Do not smoke or chew
- Do not abuse alcohol
- Monitor your health (doctor visits)
- Don’t participate in dangerous sports
- Have a relatively safe occupation
If you do your part, you can be able to purchase low cost life insurance and save yourself hundreds if not thousands of dollars per year.
Using life insurance rate bands to your best advantage to lower your premiums.
Probably 99% of the consumers never heard of the terminology called rate bands and how they can help you save money and lower your premiums. What we are going to go over is the subject of “Rate Bands” and how they will affect your premiums. I already know what you are thinking, what in the world is a rate band? You are in for a pleasant surprise and another avenue to take to receive affordable Term life insurance.
Now you are going to find out what this unusual term is all about and how it can save you money and help you secure the lowest Term life insurance rates. This is another way to achieve the purchase of cheap life insurance.
You can actually save money on your life insurance rates by purchasing a higher Face Amount. This is basically a way of buying in bulk to save money.
Here is how this works, all the life insurance companies for many years have used a concept of rate bands to calculate premium rates for Term life insurance and ever permanent life insurance for that matter. This cost reducing concept is nothing new. These rate bands are broken down into batches of 3 to 5 different band categories depending on the carrier.
Each of these bands contain a rate per thousand dollars in life insurance coverage. The philosophy is the more you buy the lower the rate per thousand of coverage. If you are looking for Term life insurance quotes, this information will help you reduce your premiums with no question about it.
Let’s use this as a simple example; If you are shopping for cheap Term life insurance quotes and you are interested in purchasing $100,000 for example in this case, the rate band will be at its highest point. This will normally hold true for the face amount of the minimum face amount offered by the company in question all the way up to $249,000 in coverage.
The bottom line here is if you are looking for a smaller face amount between $100,000 to $249,000 the life insurance per thousand will be at the most expensive point.
If you purchase your life insurance by a higher face amount the price per thousand goes down.
This next rate tier will normally be $250,000 to $999,000 which will save you money per thousand dollars of coverage. You are now buying in bulk and the price per thousand is going down.
A good example at this point is if you are planning on purchasing a $250,000 face amount. Term life insurance rate bands will allow you will be paying less money per thousand which will naturally mean you will be purchasing a larger quantity of life insurance for less money.
If you are considering the purchase of a $200,000 policy, it would normally be more cost effective to apply for $250,000 instead of the desired $200,000. This way you will be able to take advantage of the rate band effect and put it to work for you. The $250,000 policy could very well be cheaper than the $200,000 version.
If you decide to purchase a $1,000,000 face amount or higher the rates will go down again since you are buying in bulk to a higher degree.
In essence you will be applying the technique of buying in bulk just like you would for groceries at your local supermarket. Here is a good example of the breakdown.
Bill Nelson who is 30 years old wants to purchase a 20-year Term policy and wants to know his options in Face Amounts and premiums. Bill asks his agent to give him a Term life insurance quote for a $200,000 Face Amount with an A+ rated company named Banner Life. Bill’s premium would be:
$191.98 for a $200,000 Face Amount.
If Bill will consider a $250,000 Face Amount his premium will be:
$193.99 for a $250,000 Face Amount
This breaks down to $2.01 for an additional $50,000 in coverage. Bill would be foolish to pass this up for just an extra $2.01.
A Face Amount of $400,000 would cost $274.38 and a jump to $500,000 would cost $318.99 which would breakdown to an extra $100,000 of coverage for only $44.61.
If Bill was interested in a $900,000 20-year Term policy from Banner Life the premium would be $526.18. A Face Amount increase to $1,000,000 would be $563.99 which would represent an additional $100,000 in coverage for only $37.81 per year.
If we take a look at the final breakdown of Bill’s premiums we will see a rate of $.96 cents per thousand dollars of coverage with Bill’s first quote of a $200,000 face amount. His last quote of a $1,000,000 policy would break down to a rate of $.37 per thousand. This is close to 1/3 the cost between these two Face Amounts.
To summarize the premium mathematics, Bill went from a rate of $.96 per thousand of life insurance coverage to $.37 per thousand by taking advantage of the rate band advantages.
Taking advantage of the life insurance Rate Bands can make a considerable difference in premiums dollars.
This is one of the ways an experienced life insurance professional can help you secure the best term life insurance for the lowest premium possible. Being able to purchase cheap life insurance becomes much easier when you use these types of techniques.
If you are only planning on purchasing a face amount of $100,000 or $150,000 then the rate band savings will not come into the picture. If you are planning on purchasing a relatively high face amount, working with the rate bands can drastically save you a lot of premium dollars.
I understand that life insurance can be a confusing subject for many people. Not only are there different types of life insurance to choose from, each policy has elements to it that should be carefully considered. Then you have to decide on the right amount of coverage. This is going to require some careful thought. Things can get even more confusing when there are many myths going around about things like how much coverage you really need, and even if you need it at all. Let’s look at some of the top myths about life insurance and what you really need to know.
Myth #1: You don’t need any life insurance if you don’t have any dependents.
Truth: Even if you don’t have dependents, and even if you are single, you still should have enough life insurance to help cover your debts, any medical bills and funeral costs. If you are uninsured, all these expenses will be left for any family members you have to deal with. You don’t want to be that person who leaves a legacy of expenses for everyone else do you? Nobody likes to get stuck with someone else’s debt. This happens quite a bit to family members of a person with no life insurance.
Myth #2: The coverage I get from work is good enough.
Truth: It may be, but it also might not be. If you’re single, what your job provides you with may be enough. But if you have dependents or know you will need a certain amount upon your death to cover estate taxes, you will likely need additional coverage.
Your best bet is to determine your needs and thoroughly go over the life insurance policy provided by your work to see if it is enough. Many times, if you leave your current employer, your life insurance will not be portable and you will lose it. It is very common to see an employer drop the life insurance to lower company overhead costs. This means goodbye to your group life insurance coverage.
Myth #3: My life insurance coverage doesn’t need to be more than double my annual salary.
Truth: Like most things in the finance world, the amount of coverage you need really depends on your individual situation. In addition to considering how much your current income is, you should also look at your age, medical bills you may have, any debts you have, if you may have any future obligations, whether or not you are insuring anyone else, etc.
Nobody knows what the future has in store so you should have enough of a face amount to cover some additional debt you may develop.
You should also evaluate your cash flow. Take a realistic look at the amount of money you have coming in and how much you have going out. All these factors can help determine a more accurate coverage amount than just “double your salary.” Some financial experts recommend up to 10X your annual income. Your face amount has to be determined on a case by case basis.
Myth #4: My premiums will be deductible.
Truth: Unfortunately, premiums aren’t deductible. At least for most people. The only time life insurance premiums are tax deductible is if you are self-employed, and the coverage is used to protect your business assets. In this case, the premium you pay can be deducted using Form Schedule C.
Myth #5: Life insurance is absolutely necessary.
Truth: Okay, in most cases, having life insurance is really a good idea. I mean, there are so many good reasons to have a life insurance policy. It can be a reassurance that your family would be taken care of if anything were to happen to you. It is a good, safe way to protect your assets and accumulate cash value. Also, any outstanding medical, funeral and debt expenses wouldn’t fall on your loved ones.
However, some people with no dependents or debt, may be able to get away with just self-insuring, covering their medical and funeral costs.
Myth #6: I should buy term life insurance and invest the rest.
Truth: Term isn’t always the answer. There are some major differences between term and universal life insurance, with pros and cons to each of them. For example, term insurance may be for you if you need temporary protection. It comes with a lower premium, which is the main draw for many people. However, term insurance premiums increase to the extremes after the initial term period. Upon death, term life insurance pays face value. It does not build any equity for the time you own the policy.
Some forms of Universal life insurance, on the other hand, is more expensive than Term but it does build up in value. You are able to take loans out against your policy if needed. For those of you who know for a fact that you must be covered upon death, universal life will be the smarter investment for you.
Myth #7: Only the family breadwinner needs life insurance.
Truth: Logically speaking, it does make some sense to insure only the money-maker of the family. However, it pays to insure the other partner as well. Even if that partner isn’t raking in the dough, the costs to replace him or her may be higher than you think. Many people underestimate the value of their spouse until something happens to them.
Besides initial funeral and possible medical costs, you could be facing new costs like childcare and cleaning services that you never had to pay before. For a husband to have to pay for the services normally handled by his deceased wife, this can get very expensive.
Myth #8: I don’t need any life insurance at all. I’m better off just investing my money.
Truth: Unless you can honestly say your gains are equal to or more than your losses, meaning you have the same number of assets as you will spend/need upon death, you will need some sort of life insurance coverage. The exception is if you’re among the few that fall under myth #5. If you pass away before you ever have a chance to save money and invest it, you will be in for a big surprise using this theory. Also, some people are poor investors.
Also, if you have more than say, 1 million in liquid assets, you can consider whether or not you need life insurance. Keep in mind that even with a large accumulation of assets, you still take a big risk by cancelling your life insurance policy, especially if you have dependents. This would usually never be a smart move for anyone.
If you are going to purchase Term life insurance, connect with an experienced independent agent or broker.
Just like the old saying, “your insurance is only as good as your agent”. The main goal is giving yourself the edge to shop the complete life insurance market to make sure you are getting the lowest rates possible. You will not be able to do this with a State Farm or Farmers agent for example. These agents are limited to one company and is definitely not going to work in this competitive life insurance market.
Laddering life insurance policies is another way to build a excellent life insurance portfolio and spend less money doing it.
Laddering Term life insurance policies is simply having more than one policy so your life insurance can work in stages instead of purchasing just one big policy you can have policies that work for a specific number of years and then drop off in time. Here is an example of how it works:
Tim has a 20-year mortgage of $250,000 on his new home plus other day to day financial liabilities such as car payments and college tuitions.
Tim purchased two Term life insurance policies. One policy is a 20-year Term policy to cover Tim’s mortgage with a face amount of $250,000 plus another Term policy for 30 years for $150,000. After 20 years, the first policy drops off because Tim’s house is now paid off and he still has another smaller policy for $150,000 to cover Tim for his other liabilities he will continue having. This will be cheaper than having one big policy for $400,000 that he would be paying for the full 30 years he will need life insurance. Laddering life insurance policies works great and save you money at the same time.
Connecting with an independent agent will give you the largest selection of companies to choose from.
We work with over 40 trusted life insurance company’s such as Banner Life, Protective Life, Transamerica, Prudential, Assurity, SBLI, Voya, AIG American General, Mutual of Omaha, MetLife, New York Life, ING, AXA Equitable, Genworth Financial and many others. Our quoting system is free for you to use and displays all these companies and more. Feel free to call us toll free 7 days a week, we would be happy to answer any of your questions. Thank you for visiting our website and taking the time to read this article. Visit our About Us page to learn more about us and our business.