7 Tips to Save Money on Life Insurance

The top seven tips to save money on life insurance are 1) getting the right policy, 2) buying when you’re young, 3) taking advantage of multi-policy discounts, 4) finding the right insurance broker, 5) planning well for the future, 6) using a beneficiary, and 7) shopping around to compare life insurance quotes before you buy. Save money on life insurance now with our free quote comparison tool below.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Nov 6, 2020

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Saving money on your life insurance can be important, but choosing the cheapest life insurance company is not always the safest plan for your family’s future. There are ways to reduce the cost of life insurance without sacrificing the coverage you need from a company you can trust.

Obviously, taking care of yourself and maintaining your health is a primary concern, but following these 7 tips to save money on life insurance will pay off even more.

  1. Get the right kind of policy. There are two main types of life insurance, and each one has benefits and disadvantages. Term life insurance is
    best applied to goals that have a specific time limit, such as providing for college tuition or paying off the mortgage on the family home. Permanent life, also called whole life, will follow you throughout your entire life and is a good choice for many reasons, including the ability to use it as a way to help you meet goals while you are still living.
  2. Buy life insurance while you are younger. The sooner you buy life insurance in your life, the lower your premiums will be. Insurance companies base part of your premium on your life expectancy, so you can save money by purchasing a whole life policy when you are in your 20’s or early 30’s. Additionally, buying a whole life policy early means that you will have more
    accrued value in the future. This could be useful for adding a new room to the home or some other future goal.
  3. Multiple policies with one company will save you money. Insurance companies consider someone purchasing more than one insurance policy through the same company as a form of customer loyalty. Additionally, you are less of a risk when you have multiple policies because of the odds against having to pay out on two policies at the same time. If your life insurance company also underwrites health, home or auto coverage, you could lower your insurance costs by using them as your primary insurer.
  4. Brokers work for you. Insurance brokers are independent insurance representatives. They can save you money because they deal with multiple insurers and can choose between companies to find the best deal for each customer. If you are dealing with a dedicated, or captive agent, then your options for coverage will be more limited, and you may be encouraged to
    purchase coverage that you really don’t need.
  5. Plan for the future. Life events happen at different times, and it may be necessary to take out more than one life insurance policy to protect the things you hold dear. In most cases, a single whole life policy can be complemented by term life policies to cover the things that come up later. You do not have to anticipate all of your insurance needs when you buy your
    first policy, and can save money by waiting to buy extra coverage until you need it.
  6. Do not own your life insurance policy. If you are listed as the owner of your own insurance policy, any proceeds from your life insurance policy can be taxed as part of your estate. Insurance agents and accountants alike advise people to assign ownership of their life insurance policies to the beneficiary or a trusted executor.
  7. Shop around before you buy. You do not have to buy the first policy you get a quote on. Life insurance is an important financial tool and should be treated as such. Shop around, study the companies you are considering and make sure that you are investing your insurance premiums in a company that is going to be around for at least as long as you are.

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