Life Insurance Shopping Tips

For life insurance consumers, these are the best of times. In the last 15 years, term life insurance rates have declined by over 50%. Plus, the Internet gives consumers a powerful term life insurance pricing tool. Owners of older term life insurance policies could save $100's, some $1000's by updating their older policies.

Here are a few hard-hitting consumer tips that we believe are rarely found elsewhere.

1. Stay in control of the life insurance shopping process.

Today, most life insurance quote Websites ask for or your full name, home address, e-mail address, and telephone number. But in reality, only your Zip Code is required (along with some preliminary health information) for a life insurance company to provide you with reasonably accurate term life insurance quotes.

Be very careful. Many Websites are only in the business of selling your name and personal information to outside insurance agents. Typically, your personal data is sold many times.

It's OK to give detailed health information, as long as you do so anonymously. (See Internet Secrets for more information.)

Don't allow someone you don't know decide which insurance agents will call your home, and when. Rather, seek out a good health insurance insurance agent when you are ready. (See Local Agents for some tips.)

2. "Look Your Best" for the life insurance medical exam.

For life insurance, the more medical information you provide, the better the price.

In order to qualify for the best life insurance rates, insurance companies will require that you have a brief medical exam, at no cost to you. Taking a few steps to look your best for this brief life insurance medical exam could save you money.

The life insurance medical exam is normally performed by a licensed nurse or paramedic who comes to you. The exam may be done at your home or office, wherever is most convenient for you.

The exam is brief, generally lasting approximately 15 to 20 minutes. There is no undressing required. The exam will consist of a series of questions pertaining to your medical history, some parental medical history, and taking your height, weight, pulse, and blood pressure. Other tests may also be required.

Sometimes a blood test is required (usually a finger stick). Almost certainly, a urine sample will be required. When the examiner calls to schedule the exam, you should be informed as to what specific tests will be necessary.

Important: You should watch what you eat prior to the exam, so mornings are normally the best time to schedule your exam. This is when your cholesterol levels and blood pressure are usually the lowest.)

For some suggestions to help ensure the best possible results on your brief life insurance exam, see our report "How to Look Your Best" (opens in a new window).

3. Buy an amount you can afford to keep for the long-term - as planned.

It can be costly to let your policy lapse. Yet according to industry statistics, over 90% of all life insurance polices lapse before the end of their term.

Some policies are replaced with new lower-cost policies. But many life insurance policies lapse because people wanted or needed to cut back on household expenses. In some cases, people purchased too much for their budget in the first place.

Plan sensibly for the long-term and stick with the plan.

Step 1: Determine how much life insurance you need and for how long. (For families with young children, 20 year level-term is a popular choice.) One simple rule of rule of thumb for "how much" is ten times your annual earnings. Also, you'll find many "life insurance needs calculators" online.

Step 2: Get a range of quotes for your needs (see Tips #4 below). These quotes are merely guidelines, but should be enough to "work with the numbers."

Select an amount that comfortably fits in your budget today, and would likely fit during lean times as well. Don't become "insurance poor." Otherwise, it's simply too tempting to drop the insurance later. (At least, that's what the statistics seem to say.)

4. Rates vary widely - comparison shopping works - some suggestions.

Rates quoted online for the same life insurance policy, from the same company, can (and often do) differ from website to website.

Regardless of the rate you receive online, your final premium rate will depend on several factors which include: Health History (including your immediate family), Build (height & weight), Blood Pressure, Cholesterol (levels and ratio), Driving Record, and Lifestyle (your occupation and hobbies).

5. Additional quick-tips you've probably seen elsewhere, but worth repeating.

- Pay attention to the conversion option. It might be of value in later years. (A policy tie-breaker.)

- Quit smoking, and if you quit, check out how much you could save with a new, non-smoker policy.

- Never pay cash for any insurance policy - life, health, car, etc...

- Make sure you receive a written policy from the insurance company.

- Life insurance you likely don't need: flight Insurance, mortgage insurance, life insurance on a child.

6. Normally, it costs no more to use a good, local life insurance agent (see Internet Secrets).

Life insurance can be confusing. A good local health insurance agent may be be able to help you at no additional cost. (See Local Agents for tips on how to find a "good" health insurance agent.)