Quick answer
The eleven biggest levers for cheaper life insurance are: (1) shop at least three A-rated carriers because rates for the exact same coverage vary 20 to 40 percent, (2) buy young to lock the lowest rate class for the full term length, (3) be tobacco-free for at least 12 months before applying, (4) pick the right carrier for your specific health profile rather than the cheapest overall carrier, (5) avoid risky hobbies and DUIs in the 5 years before applying, (6) pay annually rather than monthly to skip the modal fee, (7) buy only as much term length as you actually need, (8) maintain a healthy BMI, (9) review prescription history before applying, (10) work with an independent broker instead of a captive agent, and (11) avoid policy upgrades and riders you do not need.
What You Should Do to Get the Best Rates
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Shop online.
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.
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Look at term insurance first.
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.
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Have your spouse apply for a policy at the same time.
- If you have a spouse, applying together provides leverage. When an insurance company declines or gives a bad price to one spouse, it runs the risk of losing 2 new policies. The company has spent money underwriting the applications and may provide lower pricing for one spouse to get your business.
- This is also an opportunity to increase the amount of coverage available to you. When you apply with your spouse, the insurance company is typically willing to provide the same coverage to both spouses using gross household income, rather than individual income.
- Some companies will offer up to a 10% discount to one spouse when you both apply at the same time.
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When comparing prices, use the exact same product specifications.
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.
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Have a good estimate of your health class.
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:
- Preferred Plus (the lowest price)
- Preferred
- Standard Plus
- Standard
- Table 2-10
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.
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Quote long.
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.
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Know your medications and doctors.
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.
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Be optimistic when answering questions.
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:
- I feel great.
- My condition is well-controlled.
- My condition is mild.
Don’t lie, of course.
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Prepare for the medical exam.
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.
- Avoid fatty or fried foods the night before your exam.
- Take the exam in the morning, when you are groggy.
- Fast for 12 hours before the exam.
- Don’t use caffeine before the exam.
- Don’t use tobacco before the exam.
- Don’t exercise before the exam.
- Sit up straight when they take your blood pressure.
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Use an independent agency for personalized help.
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.
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Conduct a “quick quote” if you have medical issues.
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 Insurancy.
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Ask the underwriter for a better price.
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.
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Find out the maximum amount the company will offer you.
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.
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Pay annually.
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.
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If you get approved, accept the policy.
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.
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If you get declined, don’t give up.
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.
Ready to shop for life insurance? Start here
What You Should Not Do
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Don’t lie on the application.
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.
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Don’t leave out information that is on your public reports.
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.
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Don’t apply with your home and auto insurance agent.
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.
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Use insurance lingo that underwriters understand.
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.
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Avoid these words.
Certain words and phrases will trigger a higher rate. If possible, avoid these words and phrases:
- Chronic
- Out of control
- I think I’ll see another specialist soon
- I should see a doctor
- I’m worried
- I don’t know
Of course, don’t lie.
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Don’t be pessimistic when answering questions.
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:
- I don’t feel good right now.
- Nothing is working.
- I feel terrible.
- Things are not looking good.
Again, don’t lie.
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Say no to replacing a current policy.
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.
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Don’t buy the waiver of premium rider.
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.
Insurancy Recommendation
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.
Frequently Asked Questions
How can I get cheaper life insurance?
The single highest-ROI step is shopping at least three top-rated carriers because rates for the exact same coverage vary 20 to 40 percent between insurers. After that, the biggest levers are: lock your rate young (a 30-year-old pays half what a 40-year-old pays for the same 20-year term), be tobacco-free for 12+ months before applying, pick a carrier whose underwriting is friendly to your specific health profile, pay annually instead of monthly, and work with an independent broker rather than a captive agent so the broker has no incentive to push a particular carrier.
What is the cheapest type of life insurance?
Term life insurance is the cheapest type by a wide margin. A healthy 35-year-old can buy $500,000 in 20-year term coverage for $20 to $26 a month. The same person buying $500,000 in whole life coverage would pay $400 to $600 a month - roughly 20 times more per dollar of death benefit. Term life is structured as pure insurance with no cash value; whole and universal life are designed to build cash value, which is why the premium is so much higher per dollar of coverage.
Does shopping multiple carriers actually lower my rate?
Yes, significantly. Rates for the exact same coverage vary 20 to 40 percent between A-rated carriers because each carrier underwrites slightly differently. A 35-year-old healthy non-smoker buying $500,000 in 20-year term may see quotes ranging from $19 a month (Banner Life, Protective) to $32 a month (a captive carrier) for the same coverage. The variance is even larger for applicants with health conditions because some carriers specialize in high-cholesterol, sleep apnea, or controlled diabetes while others heavily down-rate those same applicants.
How long do I need to quit smoking to get non-smoker rates?
Most carriers require 12 consecutive months tobacco-free to qualify for non-tobacco rates, including no cigarettes, no cigars, no pipe tobacco, no chewing tobacco, no vape with nicotine, and no nicotine patches. A few carriers require 24 or even 36 months. The difference is significant: a tobacco user typically pays 50 to 150 percent more for the same coverage. Some carriers (Prudential, Lincoln) offer "occasional cigar use" rates that allow up to 12 cigars per year without triggering tobacco rates - useful for buyers who only smoke a cigar at weddings or holidays.
Does my BMI affect my life insurance rate?
Yes. Each carrier publishes a build chart that maps height-and-weight combinations to underwriting classes. A 5'10" male at 175 pounds (BMI 25.1) typically qualifies for Preferred Plus or Preferred rates; the same male at 220 pounds (BMI 31.6) usually moves to Standard or Substandard rates - a 25 to 60 percent premium increase. Carriers differ on where they cap each class, so an applicant on the edge of two classes will get materially different rates from different carriers. An independent broker can pre-screen the build charts before submitting.
Does paying annually really save money on life insurance?
Yes. Most carriers add a modal charge for monthly, quarterly, or semi-annual billing of 4 to 8 percent over the annual premium. On a $500-a-year policy, monthly billing typically costs $530 to $540 a year. On a $2,500-a-year policy (mid-six-figure permanent), monthly billing costs an extra $100 to $200 a year. If cash flow allows, pay annually. If you must pay monthly, choose carriers with the lowest modal charge - Banner Life, Protective, and Pacific Life all have low modal charges.
Should I buy more than one life insurance policy to lower my rate?
Sometimes. A common strategy is "laddering" - buying multiple shorter-term policies that expire as your obligations end rather than one long-term policy. For example, instead of buying $1 million in 30-year term, a buyer with a 25-year mortgage and a 5-year-old child might buy $500,000 in 30-year term plus $500,000 in 20-year term. The 20-year layer expires when the child reaches age 25 and total premium is 15 to 25 percent lower than the single $1 million 30-year policy. Laddering only works if you can confidently size the shorter layers.
Will a DUI affect my life insurance rate?
Yes, especially within 5 years. A single DUI in the last 12 months typically results in a Table-rated (Substandard) policy or an outright decline at most carriers. A DUI between 12 and 36 months ago usually adds 50 to 100 percent to the premium. A DUI 5+ years ago with no subsequent violations is often classified as Standard. Multiple DUIs in the past 5 years almost always result in a decline. Some carriers (Foresters, Mutual of Omaha, Prudential) are more lenient on a single isolated DUI than other carriers.
Do I get a discount for using an independent broker?
You typically pay the same premium whether you buy through an independent broker or directly from the carrier - state insurance law generally prohibits brokers from undercutting the carrier's posted rate. The advantage of an independent broker is access: a single application gets you quotes from 30+ carriers and you can compare rates side by side. Captive agents (State Farm, Northwestern Mutual, MassMutual) can only offer their own carrier's rates, which may be 20 to 40 percent higher than the lowest-priced carrier for your exact profile.
How can I qualify for the lowest rate class - Preferred Plus or Super Preferred?
Preferred Plus (also called Super Preferred or Preferred Best at some carriers) is the lowest available rate class and typically requires: no tobacco or nicotine use in the past 36 months, blood pressure consistently under 135/85, cholesterol under 220 with HDL ratio under 5.0, BMI between 18.5 and 27 (carrier-dependent), no prescription medication for chronic conditions, no DUI in 5 years, no recreational drug use, no family history of cancer or heart disease before age 60 (in parents), and no high-risk hobbies. Most carriers reserve Preferred Plus for about 15 to 25 percent of applicants.
