If you have a spouse and children, owning life insurance is probably a good idea. If you have a non-working spouse, toddlers, and a tremendous amount of debt, then owning life insurance is a must. Tomorrow is not guaranteed. Please protect your loved ones.
Even if you can self-insure because you’ve got way more assets than liabilities or you’ve got enough passive income to cover for all your family’s ongoing expenses, getting life insurance may still be a good idea depending on the cost.
For over 15 years, life insurance has provided me peace of mind through various stages of my financial journey. Too bad a $1 million 10-year term life policy runs out in 2023 and I’m not getting a new one.
Be Careful About Seeing Doctors Before Getting A Life Insurance Policy
One of the reasons why life is hard is because there are many systems in place that are stacked against you. It’s hard to figure out how to navigate various systems to get the best possible value. The healthcare system, in particular, feels like one massive sham for American consumers.
In 2017, I had the “brilliant idea” of going to the doctor more often to get my money’s worth. At the time, I hadn’t gotten a physical in five years, had just turned 40, and wanted to check out my snoring habit.
When a new sleep center, called EOS Sleep, opened in San Francisco, I thought it might be wise to check it out. I was curious!
If I was going to pay, at the time, $1,820 a month for health insurance, I shouldn’t feel bad about checking out any health issue, no matter how small because you just never know.
I had an oncologist friend tell me once that the cure to cancer is to detect and treat the cancer early. He said too many people come to him when the cancer has already metastasized (stage 4). Unfortunately, once you reach stage 4, the 5-year survival rate is only about 1 percent.
Treating Snoring Cost Me A Fortune
To treat my snoring, I went to the overzealous EOS sleep center where I met an overzealous sleep doctor who checked out my nasal septum without me saying yes. I suddenly found some rod jammed up both nostrils. Once I got the bill, I learned that that 2-minute inspection cost my insurance $1,000!
He then encouraged me to take some sort of machine home that would measure my snoring intensity. Sure, why not since my insurance paid. I was curious to see the results.
After he got the tests back, he, of course, said I snored a lot and had sleep apnea. Therefore, he recommended I use a CPAP machine to help with my breathing and snoring. I agreed to try the CPAP since my insurance covered it. I also had a friend who had found using a CPAP to be beneficial.
I tried the CPAP machine for 30 days and decided it wasn’t for me. It constantly woke me up in the middle of the night and it was uncomfortable to wear.
When all was said and done, the sleep doctor charged my insurance around $6,200. I thought that was a lot of money, but I also felt kind of good that I was able to get some value from my health insurance.
Again, I had not seen the doctor for anything in years at that point, despite paying more than $22,000 a year in health insurance premiums. Oh, how I wish I could get healthcare subsidies like some folks who are multi-millionaires.
Then I had a weird feeling that maybe I was screwing myself in some other way. So I decided to take a break from getting my money’s worth.
My Life Insurance Premium Skyrocketed
In 2013, I decided to get a 10-year $1 million term policy for $39.99 a month. I was a healthy 35-year-old back then who had a long-term relationship with USAA since 1996 because my grandfather served in WWII and my father served in Vietnam.
Instead of waiting until 2023 to renew, I decided to get a free quote with my existing provider in 2018 to see if I could get a new term policy. This was one year after seeing the sleep doctor.
I figured the younger I get a new term life insurance policy, the cheaper the premiums would be. Besides, as a new father in 2017, I wanted to get some extra financial security.
To get a $1 million term policy, I had to get my blood drawn, which is the main bummer for getting a term policy of this size. For policies under $1 million, you usually don’t need a medical checkup. After about three weeks, USAA came back with a new 10-year term life quote.
Ready for it? $450/month from $39.99/month! WTF! How was it possible that I now had to pay 11X more a month for a 10-year, $1 million term just four years later?
Between the time when I got my $1 million, 10-year term policy between 2013 and 2017 when I got my exam, the only thing I did was go to the sleep doctor to check out what was going on with my snoring. I have stayed in good shape and kept my cholesterol and blood pressure in the normal range.
USAA said that since the sleep center said I had “sleep apnea,” my health insurance premium increased. I scored excellent on 10 out of their 11 health categories, but only average for one. USAA refused to explain to me what exactly all the categories were.
I was flummoxed. My snoring wasn’t that bad in the first place. I just wanted to check out my snoring because a new sleep center had opened. After getting my sleep apnea diagnosis, my wife stayed up to observe my breathing and said my sleep apnea seemed mild.
Before going to the new EOS Sleep Center, I should have known the sleep doctors would be overzealous and prescribe unnecessary things to make as much money off me as possible. They had fixed costs to pay!
By diagnosing I had sleep apnea, they could justify charging thousands of dollars a month for the CPAP machine and other treatments I didn’t need. The EOS Sleep Center closed down a year and a half later to no one’s surprise.
The Best Life Insurance Rate Strategy
The main lesson from this post is this: If possible, get life insurance first and then see the doctor. One of the easiest and quickest ways to check for competitive term life insurance quotes is with PolicyGenius instead of applying to each carrier one-by-one. To expedite the life insurance process, you may want to settle for less than a $1 million policy to avoid bloodwork, even if you desire for more coverage. Each carrier has different rules, so check to see what the threshold is for when bloodwork is required.
The next lesson is: Don’t see a medical specialist for minor problems, no matter how much you are paying out the wazoo for health insurance premiums. Some doctors will recommend aggressive, unnecessary treatment to get paid more by insurance companies. Doctors have seen a structural decline in earnings over the past couple of decades due to bureaucracy, higher malpractice insurance premiums, and lower insurance payouts.
As you tend to trust your doctor, you’ll probably go along for the ride. Logically, from a life insurance provider’s point of view, there is an assumption that the more health work you do, the higher your risk of dying might be.
Your records will now stay online forever for life insurance companies to evaluate. The only way I might be able to rectify my situation is if I go back to the shady sleep doctors and ask them to change in my medical records that I have mild sleep apnea or after further tests, I no longer have sleep apnea.
However, if I attempt that, it’ll be another win for the sleep doctors because then they’ll get to charge me and my insurance company for more tests. Ah, what an ironic and circular trap! I’m glad they shut down. Thus, my only remaining option is to see another EN&T doctor to certify I’m OK. But if I do this, I’m afraid it might raise another red flag with the life insurance companies.
The next lesson is: Always plan ahead. Planning is free, yet for some weird reason some people still don’t plan. The cheapest time to get life insurance is when you don’t need life insurance. If you plan to have children, take on a tremendous amount of debt with dependents, or let yourself go, it’s a good idea to get life insurance beforehand.
The final lesson is: Try again some other day. Let’s say you get bloodwork done for your $1 million policy application and the results are not ideal. If you still want life insurance down the future, identify the problem areas and do your best to get healthier. For example, maybe your cholesterol level was above normal. If so, make it your mission over the next 6-12 months to reduce your cholesterol level and then reapply for life insurance.
I spoke to my life insurance provider who said they are certainly willing to reprice based on new data. If there was ever a time to try and eat better and exercise more, now is it.
* An interesting idea presented by a reader is get a new checkup and pay all cash. If the tests come back all-clear, then report the results to the insurance company.
The Bright Side Of Expensive Life Insurance
There is a bright side to screwing myself and now facing expensive life insurance premiums. This experience helped me to not only write this post to help others think more strategically about saving money on life insurance, it has also helped me feel more comfortable with self-insurance.
Our household has assets that are currently worth around 15X more than our liabilities. But now that my life insurance rate may be skyrocketing, I’m now motivated to pay down even more debt and boost wealth further before my term life insurance expires on Jan 5, 2023. I’m also motivated to stay in good enough shape so that I can still wear my 22-year-old jeans.
Finally, if I self-insure starting in 2023, I will save anywhere from $80 – $500 a month in life insurance premiums for a $1 million, 10-year term policy, depending on my bloodwork. That adds up to $960 – $6,000 a year in savings or $9,600 – $60,000 in savings over 10 years.
Maybe checking out my snoring habit was a good thing after all!
Life insurance recommendation: Instead of applying to each life insurance company one by one to find the best rate, apply on PolicyGenius instead. Once you apply, you can compare multiple rates at once to see which life insurance policy is best for you. It’s the most efficient way to go and it’s free. I’ve met both founders multiple times over the years and I really believe in the service they’ve built.