Are you wondering how to get more life insurance for less money? My wife, Sydney, did just that.
She shares how she was able to double her life insurance death benefit for less money with PolicyGenius. More life insurance for less money is always great. The one thing we’ve all learned during the pandemic is that tomorrow is not guaranteed. If you have debt and/or dependents, getting life insurance is a must.
Taking My Life Insurance Policy For Granted
At my last full-time job of 10 years, one of the free benefits that came with it was life insurance. When I first joined, I was single, didn’t have kids or a lot of debt, and was pretty carefree at age 25.
Life insurance didn’t mean much to me back then. Today, life insurance is very important to us because we now have two kids. Sam has talked about his life insurance plans, but we had seldom discussed mine.
If you’re going to get life insurance as a couple, don’t forget to get life insurance for both people. The amount of life insurance to get will depend on each person’s ability to generate income and cover any outstanding liabilities.
During our expense audit, we meticulously tried to cut costs on every item. What we realized during this exercise was that Sam and I have been spending more than we should on several things for years. One of those things was my life insurance policy.
Given we have been saving at least 50% of our income for over a decade, we got lazy with always trying to optimize our expenses. Laziness is probably one of the number one money-makers for companies today.
How To Get More Life Insurance For Less Money
A lot has changed since I first had employer sponsored life insurance at age 25. I’m turning 40 this year, plus Sam and I have our two young children to raise. Fortunately our finances are secure; they are also much more complex.
Some of our assets are illiquid and we don’t want our kids to be forced to sell anything just to pay for ongoing living expenses. We like the financial security and peace of mind life insurance provides.
In addition, Sam and I have been researching and writing a lot about life insurance over the last month. Naturally, we took a closer look at our existing coverage.
- Sam talked about why you should be careful about seeing your doctor before getting life insurance because it may affect your premium.
- He also learned how he could convert his term life insurance policy into a permanent policy and retain his Preferred Plus rate class.
- Then, I went out shopping for more life insurance. I wondered if I was still eligible for decent rates. The results shocked me!
Here’s my personal story about how to get more life insurance for less money.
My Rookie Mistake Buying Life Insurance
Thanks to the advice in Sam’s book, How To Engineer Your Layoff, I got paid to leave my full-time job in 2015. It was such a surreal experience to be able to work part-time for full time pay for several months and then get a severance check.
Several months before I left, I started thinking about how much private life insurance I should purchase since I was losing that benefit from work.
I was 34-years-old at the time and in good health. Sam and I still weren’t sure if we would have kids in our future yet. So, without too much mortgage debt and zero dependents, I decided to get a 30-year, $500,000 term life insurance policy.
Mistake Of Not Shopping Around
We were already using USAA for homeowners insurance and auto insurance, so I called them up to get a quote for life insurance. I was too lazy to look elsewhere and figured they would offer competitive pricing.
This was mistake #1. Not shopping around. Unlike buying gas or a pair of socks, nobody really knows what a standard life insurance policy rate should cost because there are so many variables.
What I should have done was used PolicyGenius to get a range of quotes from multiple carriers for free, but I didn’t know any better.
Anyway, I called up USAA and answered a simple medical questionnaire over the phone. Next, I scheduled a basic health exam by a licensed nurse at my house. Then my application was reviewed by their underwriting team.
Roughly four weeks after my initial phone call, I signed my first self-paid life insurance policy:
- $500,000 term life insurance policy with USAA
- 30 year term from 2014-2044
- $66.65/month fixed-rate premium
I thought that was an OK price at the time. But now I have a lot more knowledge about all the different types of life insurance and getting quotes. I could have saved a lot more money if I went elsewhere!
Shop For Insurance The Smart Way
With the birth of our second child, more mortgage debt, and my 40th birthday rapidly approaching, we decided it was worth it to see if I could get additional life insurance at a reasonable price.
I headed over to PolicyGenius, one of our trusted business partners, to find out what it would cost for me to get an additional $500,000 in life insurance, bringing my total coverage to $1,000,000.
I was shocked at how low the quotes were. Fascinated, I started playing around with the coverage amounts and years of protection in their quotes tool.
I quickly realized I could get double the coverage for less than what I’d been paying with USAA, plus one additional year of coverage.
New Life Insurance Policy Offering
- My current policy: $66.65/month for $500,000 coverage with USAA for 24 more years.
- New quotes: $59.34/month – $63.96/month for $1,000,000 coverage with Transamerica, Principal, AIG, Pacific Life, or Banner Life for 25 years.
I felt like such a dummy for not shopping around back in 2014 and for overpaying for the last six years. If I did, I could have certainly gotten more life insurance for less money.
Alas, nothing is certain with life insurance quotes until you apply and pass through underwriting. The pricing seemed too good to be true, but it was worth a shot to see what I could get.
Locked In A More Affordable Life Insurance Policy
I ended up applying for a 20-year, $1,000,000 policy with Principal for $42.80/month. Sam had mentioned to me that he had visited Des Moines, Iowa over a dozen times when he covered Principal Group in his past life. He liked the firm so I figured why not give them a try.
In 20 years our kids will be young adults. They will hopefully be independent or soon to be on their own. In 20 years, we should have enough financial security to cover any other expenses that aren’t covered by my death benefit amount.
Steps To Get More Life Insurance For Less Money
Here’s a quick rundown of the steps I took. You can use them to try and get more life insurance for less money as well.
1. Go to PolicyGenius’ website
First, I went to PolicyGenius’ website. I entered my basic information, the amount of life insurance I was interested in, the duration, and answered a short health questionnaire. Time: 5 minutes
2. Review instant quotes
After I submitted my basic info, a range of free quotes instantly appeared. I quickly skimmed through the top 6-7 quotes for my original inquiry of a $500,000 term life policy for 20 years. The prices ranged from $23.65 to $25.28. That is so cheap!
I proceeded to play with the quotes tool, increasing the total amount and duration. It’s so easy to adjust and see new quotes instantly. I had fun playing around with the policy terms to see how the quotes changed. Given I’d been paying so much for my USAA policy, I was quite surprised to see quotes for 20-year, $1,000,000 policies in the $39-44 range. Time: 5 minutes
3. Make a policy selection
I found a policy I wanted to learn about further and submitted my information for review. Time: 2 minutes
4. Speak with a PolicyGenius advisor
Next, I spoke with a licensed, non-commissioned PolicyGenius advisor after they reviewed my information. The rep was friendly and easy to talk to. I answered some additional health questions, we talked about the pros and cons of different providers, and I found out which quoted policies require health exams versus those who phone screen.
Insights from the advisor helped me find a better fitting policy than I expected. I decided to apply for a 20-year, $1,000,000 policy with Principal. This policy gave me the chance to pass underwriting without a health exam.
It was only slightly more than the cheapest quote, and way better than my existing policy. I like the reputation of Principal and I really hate drawing blood. I had so many blood tests last year during my pregnancy and my veins collapsed almost every time. Time: 25 minutes
5. E-sign application
The next step was to e-sign my application to Principal through PolicyGenius. Time: 2 minutes
6. Phone screen with provider
Then I was connected with a Principal agent to complete their health questionnaire over the phone. Although Principal offered the choice to complete this step online, I opted to do it over the phone.
The benefits were I could ask questions and the agent was able to insert notes for the underwriting team about a minor health condition I have.
The online option didn’t have the ability to enter notes anywhere, which would increase my chances of needing a health exam. Time: 20 minutes
7. Wait for underwriting
The Principal agent submitted my answers to the underwriting team. Now I just had to sit back and wait for them to review my application.
Two weeks later underwriting requested a copy of my Trust (the beneficiary of my policy) and my USAA life insurance policy number. Then, one week after that, I got an email that my application was approved. Waiting time: Three weeks
8. Review and sign
Twenty-four hours after I was informed my application was approved, Principal sent me my policy to e-sign. This included setting up my electronic payments.
Reading through my policy, I learned I could save about $16/year by making annual payments. That’s not a ton in annual savings, but $16 is enough to pay for a nice meal, a pack of onesies for our baby, or a preschool workbook for our son. So, I opted for annual payments. Time: 10 minutes
One week later I got confirmation from PolicyGenius and Principal that my life insurance policy is now active! Wow that was easy!
You’re Probably Paying Too Much For Life Insurance
Now you know how to get more life insurance for less money. I’m so pleased with how the experience went. Not only was I was I able to do everything without leaving home, there were no needles!
I was pleasantly surprised with the savings, the ease of the process from start to finish, and not having to complete a health exam. PolicyGenius has really made it easy to get free life insurance quotes. Not only that, they can answer any questions you have comparing policies, and assist with the application process.
By shopping around for life insurance with PolicyGenius, I was able to reduce my monthly life insurance premium from $66.65 to $42.80 and double my coverage from $500,000 to $1,000,000.
Saving $5,724 in life insurance premiums over a 20-year period feels great. But I feel even better now that I have twice the coverage with twice the number of children.
If you’ve been paying for something automatically for at least a year, chances are you’re overpaying. The life insurance industry is opaque, and PolicyGenius shines a bright light on pricing to help consumers.
Besides life insurance, you should also see if you can lower your auto insurance, homeowner insurance, cable bill, and phone bill. If you haven’t tried in a while, I bet you’ll discover some nice savings.
Reader Questions And Recommendations
Readers, when was the last time you shopped for life insurance? Did you compare quotes across multiple providers? Were you required to take a health exam? Have you found any savings with a recent expense audit as well? Have you been able to get more life insurance for less money?
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Appreciate this information on how to get cheaper life insurance for less. Checked out PolicyGenius and am awaiting decision.
Financial Samurai says
Now you know! Stay safe.
It’s also important to know that rates change over time. The best deal for you 3 years ago might not be anymore. I was able to reset my term for a lower price than I was paying.
What do you think of Index Universal Life Insurance policies? I am not sure if it is a good addition to portfolio.
One of the most practical post here! Thank you Mrs. Samurai, Just saved myself money on life insurance with PolicyGenius.
Thanks for the reminder about not settling for life insurance and to check around. I’ve had life insurance for three years, not knowing truly whether I got a good deal or not. But it seems like I can lower my life insurance premium with PolicyGenius as well. Thanks!
Great article. Appreciate the details. I would like to know Sam’s opinion on whole life vs term life. I read buy term and invest the difference. Wondering when whole life makes sense vs invest difference.
Financial Samurai says
Check out these posts:
To Save Your Rate Class, You Can Convert Your Term Life To Whole Life
Permanent Life Insurance: What Is It And Whether You Should Get It
Curtis Sharp says
Me and my wife each got a 1 million 20 yr term policy through Principal in 2013. Hers is $28/month, mine is 33/month. Loved the price. Hopefully when the policy expires at age 55, we won’t really need it anymore.
Financial Samurai says
Great rate! So cheap. If you run your numbers through a compound growth calculator, I think you’ll be surprised how much just a 4% rate of return will boost your wealth over a 20-year time period.
IMO, shopping around should apply to all insurance not just life insurance … auto, homeowners, health (if employed and have more than one choice), etc. I personally shop around about every 2 years. Using an agent who represents multiple insurance companies makes it pretty easy. Of course, using various online tools to complement an an agent’s search can also uncover better and/or cheaper policies.
Financial Samurai says
Yes, shopping around every 2 years is a good habit. We just didn’t do so b/c we have been saving 50%+ of our income every year and got lazy trying to reduce expenses.
So, thanks to the global pandemic, we’re back on the ball.
Curious did the USAA policy have extra provisions that created the additional cost. I saw in the screenshot the USSA policy said something about “future insurability” which could be a benefit for someone who has concerns about their eligibility for life insure after their term policy runs out? Also you mentioned the options you have through this site to choose different companies what are your thoughts on low price vs. financial stability. For example GE in the not to distant past had a troubled insurance division. Are you concerned about cheap life insurance paying out when needed?
Financial Samurai says
It’s important to stick with the largest insurance carriers for financial stability purposes. Principal and USAA are two of them. Others include Prudential, MetLife, John Hancock, TransAmerica, MassMutual etc. I never viewed GE as an insurance company, but as a conglomerate where insurance wasn’t a core competency.
Samurai Sydney says
The USAA policy could be converted to a permanent policy or extended past the maturity, but the pricing didn’t make sense for me.
As for the pricing through Policy Genius, there were cheaper policies by cents to around a dollar and change than the one I selected with Principal. But I wanted a big name, reliable provider which Principal is. Plus they were the only big name that had the phone screen option.
I had the same experience. I initially enrolled with USAA for a 20 year term $500k policy. 2 years later I shopped around using my credit union’s brokerage and was able to cut my premium in half with a policy from Principal. I had always used USAA and assumed, like you, that they were competitive. I was so wrong!
Sport of Money says
Thank you for such a great detailed step by step rundown on the process of obtaining life insurance.
PolicyGenius seems like a great place to have a bunch of insurance companies provide bids on a policy. Have you looked into what your rate was through PolicyGenius versus what it would have been if you went directly to Principal? Are the insurance carriers charging more through the PolicyGenius platform for the convenience of using PolicyGenius?
Also, just curious what made you want to upsize your insurance amount? You and Sam seem to be very well off financially and have passive income over $250,000 plus other assets.
Samurai Sydney says
Thanks! What’s interesting is the rate would have been the same if I went directly to Principal or if I went through a random Joe Smith insurance broker. This is because each insurance company has to file their prices with state regulators, and everyone has to use those prices.
Sam and I discussed my policy and felt that 1mil was a better fit for our family since we now have two kids and when I first got my USAA policy we had no kids.
I went through a similar process based on reading about it via FS. Great tool, and great tips. I think I went start to finish in less than 3 weeks, including the medical exam.
I did have two questions for you based on what you wrote. You said you reduced your monthly cost and doubled the coverage. Are you saying you dropped the other plan? Are you still carrying both? I assume you wouldn’t stop the other and you now have a concurrent $1M, and a $500,000 with a drop off. Correct? The original plan runs through roughly 55, and this new plan runs through roughly 60.
Also, why do you think you were able to skip the medical exam? Was it because you already had a plan in place that was recent enough? Or do you think the likelihood of collecting by roughly age 60 is so low that they didn’t need you to go through the process? I thought that the $1M and above plans required the screening. The difference as I recall, was if it was a plan less than say $750k or maybe it was less than $1M you had to go get a screening and submit results. If you passed the threshold, they would meet you at your house or office.
I have heard of people going through the scan (including FS, I think) where the medical scan/blood draw etc resulted in a less than premium rate that was originally quoted. So, I think it’s interesting that you were able to get around that.
I received the premimum rating when I went through the screening. The funny thing for me was that when I provided my rough estimates on weight, height etc. I was pretty far off on weight during the screening. I still rated highest, because I think that non smoker vs. smoker is the largest factor. So, if you can avoid the screening what prevents people of lying or omitting medical history? I assume they still go back and pull the results on your records, but if you had new issues not yet known or report… is there a chance your insurance will be void without the confirmed screening?
Anyway, interesting that you avoided the screening and still got the $1M plan. Do you think that only going for the 20 versus longer was the right call? I understand the calculation and based on your level of financial security you probably don’t need $1M. However, for $42.80/month (which would likely be higher) do you feel like you are giving up on access to free money for your survivors? I would assume that if you could get a term rate as low as you have, why not push it to the limit? Surely, you don’t “need” the money, but if your demise could net your family another $1M for a small fee, say another 5 years at $50/month roughly another $3k to still have a $1M payout, wouldn’t you do that?
I know for my family, I went out only 25 years with a $1M, but that got me to a place where everything would be covered. Only after pulling the trigger on that do I now think maybe 30 would have made more sense, and only because it was available. Then again the whole game is odd because you are betting against yourself. I’ banking on living another 50-60 years (hopefully).
Financial Samurai says
Yeah, I got quoted for one rate by USAA and then after I got my medical exam, they quoted me a rate much higher because I had gone to see a sleep doctor in between. It’s worth locking down your life insurance policy before seeing a doctor for any non-life threatening issues.
We were pleasantly surprised Principal didn’t require her to get a medical exam, since the policy was for $1M and she’s older.
I was just going to try again with USAA to see if I could get a better rate before my term policy expires. But now I’m just to try again with PolicyGenius. She did mention her questionnaire did ask for whether you have sleep apnea though.
I love USAA’s service, but I think my loyalty with them over the past 20 years may be costing me money. I just like to have the idea of all my insurance policies in one place. But with my wife, it doesn’t matter as much b/c I’m in charge of paying/monitoring all our insurance accounts.
Robert C. says
HUGE USAA fan (auto, home, umbrella), but have always had my term life with a different company. It is a shock to me that they don’t seem competitive, but have always found better rates with other companies. Need to drop 10 pounds and then start looking again! Great article, and great reminder to review all expenses.
Financial Samurai says
I’m with you. Gotta drop 10 pounds to at least come out of the shelter-in-place in better shape!
Samurai Sydney says
Hi. Thanks for your comment. My new policy itself is for $1 million until age 60. The old policy that I’m dropping was $500k. So I have $1 million of coverage total.
As for the medical exam stuff, I specifically applied to a plan that can be completed with just a phone screen for qualified applicants. This wasn’t possible in the past for policies this large. I think due to the amount of digital medical records, some providers have started offering phone screen applications.
But it all depends on the provider. Some insurers still don’t offer phone screen only, some may initially and then underwriting may still require an exam, and some issuers only offer phone screens for plans $500k or less.
This is why using PolicyGenius helped me so much. The advisor was able to quickly tell me what the minimum requirements were for each of the policies I was quoted.
I gave all my detailed medical history when I applied which can be verified through my medical records. So I don’t have any fears of claims being denied.
Sure there may be people out there who risk lying on their application, but that is a very bad move. Lying or withholding information can deny the entire death benefit payout.
If I were to die of some type of illness during the contestability period, the insurer would have to be able to prove that I had that illness already when I applied. I have nothing to hide, so I’m comfortable with my new $1 million policy and canceling my old, expensive $500k policy.
Very interesting. I wouldn’t assume people would risk lying on this type of thing, but who knows. Lots of risk to bank on the payment working in the end anyway, but hopefully all these companies can weather the storm for another 30 years, and better yet – Hopefully you won’t ever need to collect in that duration.
I’m now wondering if there are any more pros to getting the screening and blood work. Perhaps if they are just going back on your old charts there could be an error, or maybe you have transformed your life completely and got rid of any issues that would prevent the premium rate.
When I had talked to the Policy Genuius reps, it was a much more straight forward conversation. The software showed the best option, and there was a penny difference in the rate between a company I had never heard of and Pacific Life who I’ve known more about. I didn’t at the time think about asking if there were ways around the basic requirements, or if one company was more strict than the other. I guess largely because I didn’t have a fear with my health standing, but this is certainly something to recommend to others.
Follow up question on the plan you shut down. Did you go back to them and see about a rate adjustment? Perhaps they would have been willing to lower the cost of the $500,000 plan and still get a payment from you rather than lose a client. They had already been working you over for years. Seems to me they should have at least tried to match the lower rate to keep you on? In other words, would you have kept the $500k plan for say $22/month if they could have reduced the cost rather than switching companies and scaling up to the $1M for the $48/month?
Samurai Sydney says
USAA offered the conversion option (makes no sense in my case) and said they could also reduce my rate but not enough to price match or beat Principal’s rate. So I said thanks but no thanks. :)