Are you wondering how to get more life insurance for less money? I did during the later stages of the pandemic, and my wife, Sydney, followed suit.
The one thing we all learned from 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 at age 25, I was single, didn't have kids or a lot of debt, and was pretty carefree.
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 in my 40s now, plus Sam and I have our two young children to raise. Fortunately our finances are secure. But, 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 For Life Insurance
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 Life 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. That would bring 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.
Getting life insurance is a top financial move to reduce stress and anxiety. And during the pandemic with two young children, I felt the most stressed! I was excited to find the new life insurance policy offering.
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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