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Term Life Insurance Rates - The More You Know The More You Save
By: Jessica Farrell
If you’re in the market for a term life insurance policy, here are a few money
saving tips to help you keep the premiums down.
1. Buy when you are young healthy: Life insurance rates, although they contain
fees, and a myriad of expenses, are primarily based upon the statistical chances
of a person dying in a given year. Insurance companies use their own experience
plus the statistical information collected by the government. The statistics are
used to calculate the yearly ‘cost of death’ for each $1,000 of life insurance
benefit. As people grow older, the chances of dying increase. At first the
increase is slow up until middle age, and then the chance of death increases
more rapidly. As the chance of death rise, so do the premiums.
2. Quit smoking: Smokers’ premiums are nearly three times as expensive as
non-smokers. Staying away from cigarettes a week or two before your company
physical won’t do. Urine tests will detect traces of nicotine (yep, this means
chewing tobacco too). Most companies require you to be smoke free for a minimum
of one year. Some companies require two years.
3. Lose weight: Companies don’t charge by the pound, but you may be charged more
if your weight exceeds a certain level.
4. Buy direct: The internet has made it easy to shop around for life insurance
policies directly. By eliminating the middle person, you save on salespersons
commissions which are built into the policy premium.
5. Healthy people don’t need ‘guaranteed issue’ policies: People with medical
conditions may want to purchase guaranteed issue policies. These policies do not
require a medical exam and tend to have higher premiums. The company is taking
more of a risk because they don’t know your true medical condition. However, if
you are healthy, take the exam. It will prove that you are a good risk and your
rates will be lower.
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