How to Get Cheap Life Insurance

Life insurance costs are based on your age, health and lifestyle. Here are some things you can do to get the cheapest plan possible:

1. Don't smoke.
2. Buy when you are young, because you can lock in a cheaper rate.
3. Keep your weight in a healthy B.M.I. range.
4. Keep your blood sugar, blood pressure and cholesterol normal.
5. Exercise and live a healthy lifestyle.
6. Go to the doctor regularly for check-ups, especially if you do have health issues. The insurance carrier wants to know that your condition is under a doctor's supervision.
7. Take the medications you are prescribed.
8. Don't participate in dangerous hobbies like skydiving or riding motorcycles.
9. Avoid dangerous jobs.
10. Don't use illegal drugs, abuse prescription drugs, or overdo drinking alcohol.
11. Get a plan that requires a blood test and medical exam. If you don't take these tests, they will assume you are a high risk and charge you the highest rate.
12. Tell the absolute truth on your application. If you don't, your death benefit claim may not be paid by the insurance company.

The cheapest life insurance is the one you already have. Check to see if you already have this benefit from:

• Work: See if this is a benefit you have through work.
• Credit Cards: Many credit cards have accidental death insurance. This won't help if you get cancer or another illness, but in thinking through what you need, don't forget to count in what you already have.
• Life Insurance Bought by Parents or Grandparents: Ask your relatives to find out if they purchased life insurance for you when you were a child. These policies are relatively cheap and don't usually have large death benefits, but they might be all you need if you are mainly concerned with funeral expenses.

Not buying any additional life insurance is the cheapest way to go. Here are some people that may not need this expense:

• Singles: If you don't have any children or parents who depend on your income, you may only need enough savings to cover your own funeral expenses and any debts you leave behind.
• Married to a Working Spouse: Maybe you are married but you don't have children, and your spouse works at a job which would provide enough income for them if something happened to you. You may want some life insurance to cover any debts and funeral expenses, but you may not need a big policy.
• Reasons to Buy When You Don't Need It: One catch is that life insurance is generally cheaper when you are young and healthy. You may want to buy now so that it won't cost you a lot more later. That is especially true if you expect to have a family or have parents or special needs siblings you may need to support in the future.

• People who have dependents: If you have someone dependent on your income, you do need life insurance. Maybe you are like me. I didn't even think about it until I had a friend lose her spouse suddenly. I panicked. I was the mom of 5 small children. My husband had a great job, but when I really looked at his benefits, I realized he only had a small amount of life insurance from work. What would I do if something happened to him? How could I take care of my family and work full time? Should I get training for another job?
• People who are caregivers: Finally, it dawned on me. We needed life insurance. Not just for my husband, but for me too. If something happened to me, my husband would need to hire childcare and a housekeeper, not to mention someone to do his taxes and cook his food.

Any amount will help your family, so get what you can afford now and increase the amount later when you can. Affordable life insurance is the amount you really need to protect your family from financial disaster. So you need to decide:

1. How much would funeral costs be? Look into your options and make your requests clear to your family so that they won't be driven by guilt into spending more.
2. What debts would need to be paid off? Think about car, mortgage, schooling, and credit cards.
3. What income would be available? Think about how much a spouse does or could make if working full-time. If you would not want your spouse to work because of small children, then think about how much income replacement would be required.
4. How long would that income need to be available? This depends on whether you would want to replace income for a period of time (say, until small children are all in school), or whether you would want replacement income for your spouse's lifetime.
5. What about health insurance? If your spouse is not working, or if your spouse's work does not provide health, dental, vision and other benefits, you might want to include that in your life insurance amount.
6. What about costs for college? If you want to provide a college education for your children, you might want to include that in the amount of benefit you purchase.
7. Other costs? Hopefully, this list will help you think through your own special situation. There may be other expenses your family will face that you need to consider. For example, if you own a family business, you might want to provide money to make sure that can be continued or make provisions for how that could be sold.

Age is the main factor in determining life insurance cost. So buying life insurance sooner rather than later means you will get a better deal, especially if you lock in a longer term. What if you can't afford very much life insurance? Try getting life insurance which has a conversion option, which will let you change to a different policy later. I made a mistake on that. Our insurance doesn't have a conversion option, so now I'm having to get new insurance at the age of 52 when the price will be higher.

Life insurance is not like buying other products. When you want a computer, you shop around to find the best computer at a price you can afford. When thinking about which life insurance you want, you can shop around to different companies, but you won't really know what price your plan will cost until you have:

• Applied for a policy and given them health, lifestyle, work and family medical information.
• Had a medical exam and blood tests.
• Had the insurance company underwriter look at your information and given you a rating.

The rating you get will determine the price you are charged for that amount of benefit. Each company has to send their ratings and the prices they will charge to the State Insurance Agency, so they can't change the price for a certain rating, or give you a "discount."

What affects your rating? Here are the main things:

• Age: the older you are, the more expensive life insurance will be.
• Health History: especially any history of diabetes, cardiovascular problems, cancer, or other serious health condition.
• Health Exam: especially your weight, blood pressure, glucose exam and tests for cholesterol.
• Lifestyle: dangerous hobbies like skydiving, scuba diving, riding dune buggies or flying airplanes can cause your insurance to be higher.
• Work Hazards: if you are in a job which requires a lot of driving, or which exposes you to hazards, or take risks you may have to pay more for life insurance.

Term life insurance is usually the cheapest kind. Here is how it works:

• Choose a Death Benefit Amount: In term life insurance, you buy a certain amount of death coverage, such as: $10,000, $50,000, $100,000, $250,000, $500,000 or even $1,000,000.
• Choose a Term: You have the choice of terms as little as one year and up to 20 years, or sometimes more. Your coverage is over at the end of that term, but you may have the opportunity to renew for another term. However, when you renew, the price for the coverage may go up and you may need to take another medical exam.

Sometimes, people over 50 may find permanent life insurance is a better option for them. It can also be a better option for anyone who wants insurance for their whole life. Permanent life comes in a variety of forms:

Whole Life: Whole life placed a lot of the financial risk on the insurance company and so this type is less available now. A disadvantage of whole life is that the costs for administration were not transparent. Also, although whole life does build up equity, it is not generally considered as good of an investment as other places you could put your money. For people who already have whole life, you can make a 1035 exchange of the cash balance to get Guaranteed Premium Universal Life Insurance which gives no cash value but greater survivor-ship death benefit.

Universal Life: This type of insurance has generally replaced most Whole Life policies. Some Universal Life policies build cash value, but others like Guaranteed Premium Universal Life do not. There is a variety of types of these policies which give a greater flexibility in costs and whether you want to increase death benefits, or a level premium price. Although more expensive than term, Universal Life does allow for a death benefit to be paid out for:

• Paying estate taxes.
• Taking care of adult special needs children.
• Providing for needs of a family business.
• Allowing them to maximize retirement income by using life insurance to provide for a spouse, rather than taking a 2/3 spouse retirement benefit.

Life Insurance Riders are specialized provisions which you can purchase with some policies. These riders can make a particular policy cheaper for you if they help you avoid buying something else, like long-term care insurance, or extra health insurance. Here are some common riders:

• Accelerated Death Benefit: If you are terminally ill, or have a severe illness, you are allowed to take out some of your death benefit for the costs of your medical treatment.
• Children's Insurance Rider: Allows you to have life insurance for your children.
• Cost of Living Adjustment Rider: Makes your death benefit rise to adjust for the cost of living increases.
• Long Term Care Rider: Allows you to use some of your death benefit for long-term care.
• Waiver of Premium Rider: Means you won't have to continue to pay your life insurance premium if you are disabled.

• Online Search Engines: You can't actually buy insurance from an online search engine, but a search engine is a good place to get an idea of how much life insurance may cost for you. To buy life insurance, you will need to talk with an agent, fill out an application and get a blood test and medical exam. The only problem with using an online life insurance calculator is that some of them are mostly sales devices which aim to send your information to agents for certain companies who will then call you to try to sell you their product.
• Company Agents: You will need to talk with an agent to buy insurance. Sometimes you may want to buy life insurance from an agent you already know and trust. Insurance agents who work for one or just a couple of companies can be a good source of information and can help you sort through your insurance needs. A local agent may have more time for you than someone you contact over the Internet, and the price for insurance will be the same if they represent the same company because, as I noted above, prices are fixed for each rating. One disadvantage of going with an agent who works with only one company is that they may not be able to offer you the cheapest life insurance for you, or offer you the life insurance options you want.
• Independent Agents: An independent agent works with many companies rather than just one. If you do have some serious health issues or are over 50, you might want to go with an independent agent because they can steer you to the insurance company who has underwriting policies which will be more favorable for your situation.

After examining our options, I'm close to being ready to buy new life insurance for us. Do you have any tips for getting cheap life insurance? Please share in the comments.