Last updated: November 23rd, 2022
Reviewed by
Grant Desselle
Licensed Insurance Agent
The way to find the best deal is by comparing rates online. The companies with the best rates advertise online and offer free online quotes. Even if you buy from a local agent, check rates online first to make sure you don’t overpay.
If you are younger than 60 and in good health, shop for term life insurance. Term insurance is inexpensive and gives you the best bang for the buck.
If you are 60 or older, then permanent life insurance is a good option when planning for final expenses or inheritance, or for estate planning.
Consider permanent life insurance products after you have term life insurance.
When you compare products, it’s important to compare “apples to apples.” As you request quotes, use the same term, coverage amount, and health class each time. If any variable is different, the quote comparisons will be useless.
Life insurance companies offer different pricing to different applicants based on their health. When a company calculates your pricing, it estimates how long you are going to live.
The different health classes include:
It is difficult to get quotes for specific health classes, though health class is the largest factor when determining the cost of a policy. It’s worth your time to contact an agent or the insurance company to determine your likely health class.
Avoid the “bait and switch” routine, where a company quotes you the preferred plus rate. More often than not, you’ll end up with a different health class and a higher price.
You can always lower the term and coverage amount on your policy after you buy it, though you cannot increase either one without reapplying. Avoid buyer’s remorse and apply for longer coverage. You’ll save thousands of dollars by avoiding the need to reapply later.
The insurance company can see it as a red flag if you omit any medications you are taking when you complete your application. Depending on the severity of the condition the medication is for, your risk level and the cost of the policy may increase. You may even get declined if the company deems you were purposely dishonest. Make a list of all the medications you are taking, including the dosage and how often you take them.
While you’re at it, gather the names, addresses, and phone numbers of your doctors. Providing this information saves the company time and makes your application look good.
Pessimism is poison on a life insurance application. The insurance company is estimating your life expectancy, so it likes to see that your health conditions are well-controlled or stable. When asked for your opinion, be optimistic.
Use phrases like:
Don’t lie, of course.
Don’t make the mistake of winging your medical exam. The results will be recorded on your permanent record at the MIB for all other insurance companies to see.
Independent agents represent multiple insurance companies and are familiar with each company’s underwriting guidelines. Many independent agencies represent smaller insurers that specialize in insuring certain health conditions. Best of all, it costs you nothing to use an independent agency.
An independent agency can take your medical information and informally contact the underwriters at multiple insurance companies. If an agency doesn’t recognize the term “quick quote,” tell the person you’re speaking to that you want them to contact the underwriters for a quote before you apply. If the agency doesn’t offer this service, go elsewhere.
We offer independent life insurance agent assistance here at Insurist.
It doesn’t hurt to ask. Underwriters have a bit of discretion when assessing your application. You won’t jump two health classes and significantly lower your rate, but you might move up a health class.
Ask nicely for a slightly better rate. If you’re working with an agent, have the agent ask on your behalf.
When you are approved, the company has determined that you are insurable. Ask what the maximum coverage available is without having to answer additional health questions. If you get approved for $100,000 in coverage, the insurance company will also likely approve you for $500,000, and maybe more. Take advantage of the offer now, because life insurance costs more as you get older.
Many insurance companies will offer up to a 5% discount on the cost of the policy when you pay yearly rather than monthly. You can still cancel the policy at any time and get a prorated refund, so there’s little risk in paying annually. Set up ACH bank drafts to withdraw the funds each year so you don’t have to think about it.
If you apply for a policy and get approved at a higher cost, go ahead and accept the policy — at least for the time being. Insurance policies have a 30-day “free look” period, and you can cancel at any time. The important thing is to get covered. You can continue to shop for a better rate, but don’t decline coverage when it’s offered. You’ll run the risk of being deemed uninsurable later on.
Contact an independent agency that specializes in high-risk customers and ask them to run a “quick quote.” If you can’t find a company that will offer you insurance, there are associations you can join that offer group life insurance policies. Accidental policies and guaranteed issue policies are also options that can fit any budget.
Life insurance policies have a contestability clause. This means if you lie about something that would have caused a denial of coverage, the company may not pay your death claim. This is especially true if you die within the first 2 years of coverage.
Insurance companies will automatically run your public reports, which include your pharmacy report, financial history, criminal history, and previous insurance applications. Companies regard omissions as red flags, and it could result in increased policy costs or even a denial of coverage.
Before you buy life insurance from an auto or home insurance company, compare prices online with other companies.
Although some auto and home insurance companies offer a 5% discount on other types of insurance when you buy a life insurance policy through them, you will save more by choosing a company that specializes in life insurance.
It’s a good idea to make it easy for underwriters to do their job. When you use the lingo below, you can avoid further investigation and shorten the time it takes to get approved.
For health conditions and medications, underwriters want to know how severe the condition is and if treatment is working.
They use 3 categories when assessing your treatment progress: well-controlled, moderately controlled, or not yet under control.
They also use 3 categories when assessing the severity of your medical condition(s): mild, moderate, and severe.
Example: I consider my anxiety mild. My anxiety is well-controlled. I feel great. No issues.
Certain words and phrases will trigger a higher rate. If possible, avoid these words and phrases:
Of course, don’t lie.
Don’t seek sympathy on your life insurance application. When asked for your opinion, it’s best to be optimistic. Avoid using phrases such as:
Again, don’t lie.
When you indicate on your application that you intend to replace an active policy, it causes additional paperwork and delays. It could also cause your application to be declined. If you want to cancel another policy you have, do it after your new policy has been issued.
A waiver of premium rider is designed to protect you if you were to become disabled and couldn’t pay your life insurance premiums. In that case, the rider would be activated and would pay the premiums for you.
Opting to purchase this rider can double the cost of your insurance and is not worth the expense. There are several other ways to receive financial assistance if you become disabled.
A life insurance policy is a long-term contract. You will be paying premiums for decades. Even a tiny mistake during the application process can cost you thousands of dollars.
The good news is that if you make a mistake, you can try again with another company. The important thing is to get a policy.
Life insurance is a privilege, not a right. Apply for a policy now.
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
Grant's past experience includes work as a licensed sales agent for Hagerty Insurance. He has reviewed thousands of existing auto policies across the nation and issued hundreds of new ones on everything ranging from classic cars undergoing restoration to modern exotics and motorcycles.
