Working with independent insurance agents can save you money every time!
Working with independent insurance agents otherwise referred to as an insurance brokers can simplify the process of buying life insurance. They can also find the lowest life insurance rates on the market for you. There are two types of insurance agents, one being the independent agent and the other is the captive agent.
The independent agent can virtually represent all of the companies where the captive agent just one. For example State Farm, employs captive agents that just sell their own one and only product line. Captive agents work for their insurance company and independent agents work for you.Read these great money saving tips below!
Regardless of what kind of insurance you are in the market for, the independent insurance agents are the ones that obtain the lowest rates for their clients.
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There are well over 40 highly rated life insurance companies in the United States to choose from. Independent insurance agents usually use all of them. The key is to use the company that will fit your specific profile the best. Your profile with revolve around a number of areas of information such as:
- How is your height and weight ratio such as being overweight or obese?
- Do you use tobacco products such as smoking cigarettes or cigars?
- Have you been diagnosed with medical conditions such as high blood pressure?
- Do you have a dangerous occupation where you could be possibly killed on the job?
- Are you involved in any hazardous sports where you could be injured or killed?
Choosing the correct company for your specific lifestyle is very important. It is usually the number one factor when looking for the best life insurance rates. The brokers can shop the entire market for you to find the best life insurance rates.
Most people don’t relish the idea of having to take an exam along with a blood test. If you really want the get the very best life insurance rates. Take the test and get the lowest premiums possible, it will be worth it in the long run. All independent agents are contracted with companies that offer No Medical Exam life insurance but these plan designs do cost more.
Non-Med policies do not require a Paramed exam but they usually come at an additional cost. The conventional fully underwritten term life insurance plan design will still be the cheapest no matter how you look at it.
There are three main types of life insurance policies in an independent agents arsenal of products such as:
- Term Life Insurance – learn more
- No Medical Exam Life Insurance – learn more
- Universal Life Insurance – learn more
Term insurance is by far is going to be the most popular and cost effective of the three types of policy designs. Whole life is a permanent plan design that is used on a limited basis because of its cost. Many companies dropped Whole life from their product line years ago.
Universal life is a permanent product that works very well if someone wants to have life insurance for the rest of their lives which can be a great idea. You can also have a combination of term and universal life to make the perfect portfolio.
Many things come into play when looking at a potential monthly premium. Here are some of the cost factors that will affect your premium:
- Overall health history (pre-existing medical conditions).
- Height & weight (body mass index).
- Your occupation (if hazardous).
- Driving record.
- Credit history.
- Prescription drug usage.
- Parents & siblings life longevity.
- Traveling abroad (in hostile countries).
- Dangerous hobbies or sports.
All of these types of questions will appear on a life insurance application and they will all be taken into consideration.
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Instantly compare rates from over 40 of the top rated carriers. The side by side comparisons you are going to view has helped lower premiums because of the strong competition these quote engines have produced. Every carriers rates are now in plain view for every consumer to see. The carriers are forced to publish the lowest rates possible if they wish to stay competitive.
One discount you may be able to achieve is by using rate bands to your best advantage. Independent insurance agents use these all the time to help get the lowest rates for their clients. Here is a simple example on how they work. Many times people will ask for a face amount of $200,000. This is a common example.
There will be a rate band discount when a face amount is $250,000. This means that if the agent quotes the client at $250,000 instead of the requested $200,000. The total premium will actually be less while at the same time picking up an extra $50,000 in coverage for less money.
This same principal works for other rate bands beginning at $500,000 and $1,000,000 also. This is a form of buying in bulk or in other works getting discount rates for the more you buy. The rate per $1,000.00 in coverage is reduced and can add up into a very reduced premium also.
This brings up the subject of “laddering policies” to save money. Many times people will have the need for a specific face amount, which we will use $1,000,000 for the example. They may need this life insurance for 30 years but the bulk of the face amount will only be needed for 20 years. You can purchase two or more policies with staggered term periods and face amounts.
A quick example would be where an individual needs a grand total of $1,000,000. This individual has a mortgage which will last for 20 years in which this debt will drop off. In this example this person could purchase two policies. One policy for $500,000 for twenty years and then another for $500,000 for 30 years.
After the first 20 years, the 20 year term policy drops off leaving the other policy to stay in force for another 10 years. It will be much cheaper to do this that have one policy for $1,000,000 for a full 30 years. The shorter the term length is, the lower the premium will always be.
Should I purchase permanent life insurance?
Purchasing permanent life insurance (Universal Life) is always a great idea if you can afford the additional premium cost. We never know what the future holds so it is nice to have life insurance protection that never terminates like the very affordable term life insurance plans do.
Whole life will last the rest of your life but the premium is much higher than term. It is so much higher that it is not cost effective at all for most people. This is a permanent product that has a very strong cash value build up. The cash value feature is what makes the overall premium so high. Whole life could easily be ten times the premium of term insurance.
Universal life on the other hand is also a permanent product but has a much lower premium. It does not have this huge emphasis on cash build up like Whole life does. I recommend Universal life with a no cash build up feature if you want permanent life insurance at a much lower premium.
Universal life will still cost more money and in many cases over double the cost of any term product. Universal life is very affordable if purchased at a young age. Most people unfortunately wait too long to get life insurance.
Consider losing weight & stop smoking
Many people that I speak with are overweight or use tobacco products. Being overweight and or use tobacco will have a serious affect on their premiums. Most people don’t know that if they purchase life insurance with higher rates due to their weight or smoking. They can contact the company for reconsideration after they lose weight or stop smoking.
The companies will normally reconsider the individual one year after they have lost weight or stopped smoking. They can then change the health classification which will lower their premiums on an already in force policy.
The life insurance company can actually reduce their premiums if a positive change has been made. Smoking in itself can triple your rates which will produce a very high reduction in weight if the person stops smoking and stays off of tobacco for at least a year.
Only purchase guaranteed issue life insurance as a last resort!
Guaranteed Issue life insurance is a bad investment unless you are in very poor health. Anytime you purchase life insurance that has guaranteed insurability, you are going to pay very high premiums and also have a small face amount such as $25,000. Guaranteed issue life insurance should only be purchased by people who have serious health conditions that prohibit them from purchasing conventional coverage. These policies should only be purchased if there is no other choice in the matter due to extreme medical conditions.
If you do have medical conditions, sometimes purchasing a No Medical Exam policy may help, but as I just said, that is just sometimes. Conventional fully underwritten policies are almost always the cheapest and best way to go.
If you have any questions concerning life insurance don’t hesitate to contact us. We offer free help with with no cost or obligation 7 days a week. Life insurance is actually a very simple form of insurance.
If you find life insurance confusing or not. You need an experienced independent insurance agent (hopefully us) to help you and answer all your questions. If you decide you would like to apply, we offer quick and easy telephone applications.
All the best,
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