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Life Insurance Premium: 5 Ways to Reduce Your Payments

Updated: November 19, 2018

Dealing with high life insurance premiums is never easy, but there are decisions you can make to ensure you are not paying through the roof for these policies.

Most of the ways you can save money on life insurance premiums require a change in lifestyle.

Insurance companies will base their premiums on the risk factors associated with providing the policy to an individual.

If the individual is a bigger risk, they will receive a higher premium offer. In contrast, lower risk candidates get lower risk offers.

With this in mind, here are five ways to reduce your life insurance premium payments.

Quit Smoking

If you are going to take one piece of advice in order to reduce your life insurance premium, you should consider quitting smoking. This is one of the factors that can really increase the amount of money a person pays for life insurance.

If someone smokes, especially in their 40s, 50s and 60s, they are far likelier to suffer from illnesses and conditions that would shorten their life span.

For example, someone with a $500,000 policy at 30 years of age will pay $21 a month if they do not smoke. In contrast, the smoker will pay close to $70 or $80 a month. The difference is staggering, especially when you add up the monthly premiums over a ten or twenty-year period.

Older individuals will suffer even more if they are still smoking in their 50s and 60s.

Insurance companies must behave pragmatically when offering policies. If someone smokes, especially in their 40s, 50s and 60s, they are far likelier to suffer from illnesses and conditions that would shorten their life span.

In contrast, smokers have a far better chance of living longer, healthier lives – even if they do not quit smoking until they are in their late 30s or early 40s.

Lose Weight

Similar to smoking, being overweight is linked to so many health concerns and conditions. This means insurance companies will charge more for people who are overweight.

If you are overweight, the best thing you can do is spent a few years making a real effort to lose as much weight as possible.

While the increase in premiums are not as drastic as those related to smoking, a person who is medically obese may pay over 2 or 3 times more for life insurance than someone in the “healthy” weight range.

If you are overweight, the best thing you can do is spent a few years making a real effort to lose as much weight as possible. This will ensure you are in far better shape when you take your physical examination before getting a life insurance policy.

If you rush the process and get a whole life policy before losing weight, you may find yourself stuck with that higher premium for the rest of your life.

The important thing to know about weight loss and life insurance premiums is that it is never too late to make a change in your lifestyle. Individuals in their 40s and 50s have successfully lost a lot of weight and received good rates on life insurance post-weight loss.

Safe Driving

While we all know that getting into an accident means you are going to pay more for auto insurance. But did you know that your ability to drive in a safe manner can impact your life insurance rates too? The fact is that insurance companies know your entire history when you are applying for these policies.

An individual who gets into a lot of accidents, or receives a number of tickets for speeding, is a higher risk to get seriously injured or killed in crash.

The insurance company will do their research, and if they find a number of traffic accidents or violations in your record, it will give them pause.

An individual who gets into a lot of accidents, or receives a number of tickets for speeding, is a higher risk to get seriously injured or killed in crash. This increases the risk for the insurance company to insure this individual.

The company will pass on the risk to the customer through higher premiums. So if you want to avoid paying through the roof for life insurance, make sure you drive in a safe manner.

You will not suffer higher premiums if the car accident you were involved in was not your fault. This only applies to fault accidents or violations.

Get a Policy Early

It goes without saying, but the earlier you get an auto insurance policy, the more you will save on average. Individuals who get whole life policies in their 20s, 30s and early 40s will save a ton of money on premium payments throughout their life.

In order to cover the same lump sum payment that they would for the 25 or 35-year-old, the insurance company must charge much higher premiums from the 55-year-old individual.

Not only do they pay less in premiums, but they have more time to build up interest on the cash value part of their life insurance policy.

In contrast, someone who gets a policy when they are 55 is a much higher risk for the insurance company than a 25 or 35-year-old.

In order to cover the same lump sum payment that they would for the 25 or 35-year-old, the insurance company must charge much higher premiums from the 55-year-old individual.

This is why it makes a lot of sense to plan your life insurance policy when you are still young and in a good place professionally. Not only can you find a great policy at an affordable rate, but you will be secure in the knowledge that its cash value is building up over time.

Term Life Insurance

Unfortunately, we cannot turn back the clock and make different decisions when it comes to life insurance. If you are already in your late 40s or 50s, you have no choice but to go with the options available.

While the term life policy is not the most secure way to provide a nest-egg for your family, it is a good way to ensure protection against unexpected death through accidents or sudden illnesses.

One of the best ways to save money on life insurance at a later age is through term life insurance. These policies come with 10 or 20-year terms, but they are cheaper for older individuals than whole life policies.

In many cases, a term life policy is much better value for someone who is in their 50s or 60s. But it is better to look for 20-year term life policies than ones with a ten-year term. The ten-year term is too short, and will result in you having to renegotiate the policy at a higher premium in ten years’ time.

While the term life policy is not the most secure way to provide a nest-egg for your family, it is a good way to ensure protection against unexpected death through accidents or sudden illnesses.

If you combine your term life policy with a good retirement or savings plan, you should be able to leave your family enough money to live comfortably after your passing.