Many Americans have a life insurance policy. That's good news because life insurance pays for funeral expenses, medical bills and debt an individual may accumulate. Unfortunately, some people don't purchase this beneficial coverage because of its cost. Don't make that mistake. Save money on life insurance in seven ways.
7 ways to save on life insurance
- Purchase term life instead of whole life. Term coverage is generally cheaper than whole life and covers you for a set period, such as the years your children are at home.
- Stick to basic coverage. Additional riders—like child coverage or guaranteed purchase options—can increase cost. If saving is the priority, skip optional riders and buy basic coverage.
- Choose a lower coverage amount. Experts often suggest a policy that replaces several years of income, but if that is unaffordable, at minimum cover your mortgage, outstanding debts, monthly expenses and funeral costs.
- Buy while you're younger. Younger applicants usually receive lower rates, so locking in coverage earlier can reduce lifetime premiums.
- Stay healthy. Insurers price policies based on risk factors such as tobacco use, chronic conditions, family history and lifestyle. Improving health where possible can lower rates.
- Bundle policies. Buying life, auto and home insurance from the same company can lead to multi-policy discounts—ask your agent for bundling options.
- Comparison shop. Rates vary across companies, so compare offers to find the most affordable policy for your needs.
Every individual's life insurance needs are unique, but these tips can help you find affordable coverage. For a broader set of resources about products and providers, see Life Insurance.
If you work in a specific trade or industry, you may also find specialized offerings; for example, review options such as Elevator Inspectors Life Insurance to understand niche market choices.
Talk to your insurance agent for additional ways to save money and to make sure any policy you choose fits your family's needs.
Frequently Asked Questions
How much life insurance do I need?
Needs vary by household, but a common approach is to cover outstanding debts, mortgage balance, future education costs and several years of income replacement.
Is term life always cheaper than whole life?
Term life typically has lower premiums because it provides coverage for a fixed period and has no cash-value component, unlike whole life.
Will I always need a medical exam for the best rates?
Many policies require a medical exam for preferred rates, though some simplified-issue or no-exam policies are available at higher cost.
Does smoking affect life insurance cost?
Tobacco use is a major factor in pricing and usually results in significantly higher premiums compared with nonsmokers.