Finding the Best Life Insurance Rates

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If you your family depends on your income, you would like to create an inheritance to pass on to your heirs, or you want to prevent estate taxes from diminishing the value of your estate, you have a need for life insurance.

Life insurance can be used in a number of ways to pay federal and state taxes, replace income, or to create a legacy that will be passed on to future generations.

While the benefits of buying life insurance are undeniable, these benefits come with a cost. After all, you must purchase life insurance and fulfill your contractual obligations to keep your coverage active.

If you want to take advantage of one or more benefits of buying life insurance, it is crucial to spend time shopping for coverage so that you can find the best life insurance rates from a reputable life insurance company that you can trust.

Understanding how the industry works, the factors that can affect your term or permanent life rates, and different ways to lower your premiums can help you stay budget-conscious as you shop for one of the most important financial planning tools that you will shop for in your lifetime.

Read this guide to finding the best life insurance rates without compromising the level of coverage that you buy so that you can make informed decisions as a consumer. And be sure to utilize the FREE comparison tool above!

Understanding the Insurance Industry and Why Price Shopping is So Important

Best Life Insurance RatesThere is a major difference between the individual life insurance industry and the group life insurance industry.

Group life insurance is a product that is selected by your employer and that is owned by the employer. When you buy an individual policy, you choose the insurer, the type of plan, the death benefit, and all of the riders and you also own the policy itself.

If you are buying coverage individually in addition to the group benefits that you already have, you will need to understand how the industry works and how rates are set to attract specific clientele.

Federal and State Regulation

Insurance companies are not free to calculate whatever rates they please but they do set their own rates that must then be filed with the Department of Insurance and approved.

The National Association of Insurance Commissioners federally regulates the industry and has appointed departments of insurance in each state to act as state regulatory bodies who act in the public’s best interest.

The state departments will review rate filings from the life insurers and then determine if these filings are fair and nondiscriminatory. After they are approved, the company can begin to charge these rates.

How Rates Attract a Specific Niche

Now that you understand that life insurers do not have free reign when setting rates, you now need to understand how life insurers in each state develop rating plans in an effort to target a specific demographic.

A rating plan for life insurance products uses risk calculation and to predict the levels of risk for people in a wide range of classifications groups.

By analyzing claims records, assessing risks in the region, and then deciding which class of clients the company would like to target, the company will begin to set rates so that they can target a specific demographic and still stay actuarially sound in other areas.

Some life insurance providers want to sell insurance to young parents who recently had children, and others target middle-aged clients who want to buy protection that covers them through retired. By setting rates that are favorable to a specific niche, the company can be competitive with one group and stay out of markets they do not prefer to do business in.

Different companies charge dramatically different premiums than others for similar policy types and benefit amounts. This is why it is so important to comparison shop when you are buying life insurance if your goal is to find the best life insurance rates.

What personal factors will affect your personal premiums?

Now that you understand the rating factors that are beyond your control, it is time to learn about the personal rating factors that will ultimately help influence your insurance rates. Each individual rating factor will have its own affect on premiums.

Before you start the application process or even request quotes, know how your personal information will be used by underwriters to calculate how much you need to pay and which risk class you will be in from Super Preferred to Standard Tobacco User.

Age and Gender

Your age and gender will work together as a single rating factor because males and females have their own mortality rates. The best rates are offered to young females because female life expectancy exceeds male life expectancy by as much as 5 years.

The shorter your life expectancy and the closer that you are to it, the more your premiums will be because they are directly based on you age at the time you submit your application.

The most effective way to get the best rates is to buy insurance while you are still young, healthy and most importantly insurable.

Medical History and Health

All of the largest writers of life insurance who do business throughout the nation will have policies where you need to medically qualify for the most cost-effective rates.

Some of these providers do offer no medical plans, but the rates are higher because the company is not able to assess risk like they can when you provide medical records, have your blood taken, and answer medical questions.

The Health Information Privacy act says you must sign off for your records to be checked, but this signature is required when you submit a complete application. This is how your answers are checked for accuracy and validity. If you have a medical condition, you are taking medications or you have a history, disclose it for your own benefit so that there are not problems later down the line.

If you have a serious medical condition, you may be surcharged or table rated, which means that you pay additional premiums per $1000 of coverage that you purchase because you are high-risk and there is no risk class for you. When you have a very serious medical condition, you may be able to find the best rates from a high-risk insurer that does offer a no-medical policy.

Hobbies, Habits, Profession and Lifestyle


Your lifestyle can truly affect your premiums and should also influence you decision when you are choosing the right life insurance plan.

Individuals who participate in hazardous sports, who pilot planes, who scuba dive, who race cars for pleasure or professionally or who have a hazardous occupation could end up being table rated because they pose a unique risk.

Some insurers may even deny your application if the hobbies or occupations are too risky.

If you have bad habits, this can affect you too. You will be asked if you smoke, drink, use drugs or if you have been convicted of moving violations. If you answer yes to any of these, the underwriter will dig deeper.

Smoking shortens your life expectancy and raises your premiums. If you really do want to find the lowest life insurance rates, the best thing to do is to quit smoking, quit drinking and follow the rules of the road. If you continue to smoke, you could pay as much as 3 times more annually.

Tips to Consider To Keep Prices Low

In an ideal world, you could find cheap prices that are locked in for extended period of time without any exclusions or gaps in coverage. In real life, you need to learn to find a balance between the appropriate level of coverage and a price that fits into your budget.

Here are some tips to help you as you start your mission to save money on your individual life cover:

Determine How Much Coverage You Really Need

It is tempting to buy millions of dollars in cover, but you will pay the price for excessive coverage. Some companies may not even offer you this much coverage if your income and assets are not high enough. Use calculators and tools to calculate how much you reasonably need.

Buy Insurance Early

Every day that you wait is a risk, but waiting will also cost you more. If you want the best rates, buy insurance when you are young and at your healthiest.

Get Discounts

If you buy coverage with the same insurer where you insure your vehicle, you can qualify for a multi-line discount which can pay for part of your life premiums.

Now that you know how to find the best rates, it is time to pick the best company. Qualify the insurers, sift through the list, and then compare costs. Using an online quoting tool can help you compare costs in a short amount of time to find the best life rates.

Use our FREE search tool to find and compare insurance rates instantly!

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