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4 tips for securing affordable term life insurance

We want you to get the best possible value on your life insurance policy. Here are tips for picking the right policy for your loved ones and your budget.

If we could tell you one thing, just one thing, about securing affordable term life insurance, it would be this:

… Actually, wait a second. Looks like we have four things.

Because here’s the thing: With life insurance, every shopper seeks the most affordable premium rates for the best value. And, thanks to the power and transparency of the Internet, price comparisons and numerous life insurance rate quotes are usually just a Google search away.

But as any other important financial decision, when it comes to life insurance, you shouldn’t only focus on price. Not when your family’s financial future could be at stake. Taking the time to learn about life insurance companies, as well as the various types of life insurance policies that are available, can be the key to getting great coverage for as little as possible.

In fact, with that in mind, we’ve put together the following four tips to help you find affordable term life insurance that’s wallet-friendly while still addressing your coverage needs. We promise these life insurance tips are simple and easy to understand. They’ll only take you a few minutes to read, but they might have a huge impact on what you pay for insurance.

In this article:

Tip #1: Buy coverage when you’re young and healthy

Being proactive is never a bad thing. Doubly so when you’re buying an insurance policy. That’s because the lowest life insurance rates go to the youngest and the healthiest applicants. As you age, the rates you qualify for will gradually increase.

For example, a 35-year-old man in excellent health can get a 20-year, $500,000 Haven Term policy issued by MassMutual for $23.34 a month, which is less than you’d probably spend on two movie tickets. If that man were ten years older, he would pay $56.07 a month for the same 20-year coverage.

Health also matters because the healthiest people get the lowest rates. Insurance companies offer the lowest life insurance rates to those they determine offer the lowest risk of premature death. And the safest customers are the healthy ones. Just like with your age, it’s your current health right now that determines your rate for the duration of the policy.

The lowest life insurance rates go to younger, healthier applicants. If you know you need life insurance coverage, don't put off buying it.

And if the best pricing going to the young and healthy wasn’t enough to spur you to buy life insurance, we have one more benefit for you: the buying experience. The less complicated your medical history is — which is a benefit the young and healthy enjoy —, the easier and faster it usually is to buy a policy. You might even be able to get life insurance without a medical exam. Take the InstantTerm buying experience, for example. This innovation allows qualified Haven Term applicants between the ages of 18-59 (and for policies up to $1 million) to finalize term life insurance coverage — issued by life insurer MassMutual — without a medical exam. [Note: payment of a life insurance policy is based on the truthfulness of information provided in the application.]

Even if you do need a medical exam to finalize coverage, you should lock in your rate as soon as possible so your age and health status can save you money on premiums for the next 10, 15, 20 or 30 years.

Tip #2: Make sure you’re buying the right type of policy for you

Age and health aren’t the only things that matter when you’re looking for an affordable life insurance plan. The type of life insurance policy you choose (either term or permanent coverage) can have a significant impact on not only your premium costs but also how large of a policy you get for that money. Let’s take a look at term life vs whole life.

Term life insurance

As the name alludes to, term life insurance coverage lasts for a predetermined amount of time that you select – usually 10, 15, 20 or 30 years. It’s one of the simplest and most affordable types of life insurance.

If you were to die during the term length, your beneficiary would receive a payout (called a death benefit) equal to the policy’s coverage amount, income tax-free.

Medically underwritten term policies take into account your current health and allow the insurer to make an informed decision on your risk profile, which generally means lower premiums if you are reasonably healthy. While this may mean having a short medical exam, the long-term cost savings are often worth the small inconvenience.

Once the term length is up on your insurance plan, coverage ends. At this time, you can choose to renew it, but since your rates will be based on your age and health at that time, they will be higher. (You can get free term life insurance quotes here.)

Medically underwritten term policies take into account your current health and allow the insurer to make an informed decision on your risk profile, which generally means lower premiums.

Simplified issue term life insurance

Simplified issue policies typically require applicants to fill out a short questionnaire in the underwriting process, with a few health-related questions. Haven Life, for example, offers such a policy with Haven Term Simplified. No medical exam is needed to apply and get a coverage decision. [Note: payment of a life insurance policy is based on the truthfulness of information provided in the application.]

Simplified issue policies make buying life insurance coverage extremely simple and are a good choice for individuals who absolutely do not want to take a medical exam. However, you are usually going to pay more than you would for a medically underwritten term life insurance policy. With these types of policies, an insurer knows less about your health, and generally unknowns equal higher premiums. Additionally, this type of term life insurance plan is limited to coverage amounts of $500,000 or less. You can get a quote for Haven Term Simplified here.

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The answer to that question is easy (which is exactly how Haven Life makes applying for term life insurance)

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Permanent life insurance

Another option for coverage is a permanent life insurance policy. Permanent life insurance – which includes whole life – is a type of policy where coverage lasts for a lifetime (assuming you continue to pay the premiums), and it offers a cash value component that can grow over time. Because of the lifetime coverage and the cash value feature, a whole life policy is much more expensive than a term policy – generally 5 to 10 times as much per month. Because of the complexity of a permanent life insurance policy, buyers should work with a financial professional to purchase and maintain their coverage.

Accidental death coverage

Another common policy type you should be aware of is accidental death coverage. These policies can usually be purchased online but can leave you (and ultimately your family) with inadequate coverage. While some coverage is better than nothing, any life insurance buyer wants to feel confident that the policy they buy is suitable for their needs and priced appropriately.

Like simplified-issue life insurance, accidental death coverage can leave you with less value for your dollar. This kind of policy does exactly what the name implies – covers you from an accidental death, such as death resulting from a car accident, a bike accident, a fire or another kind of freak accident. However, accidental death policies have numerous exclusions, such as physical and mental illnesses, that impact millions of Americans. Typical policies exclude things like cancer, heart disease, diabetes, overdoses, and suicide. When you shop for a policy that could potentially cover you for 30 years, it’s a good idea to consider the possibility that your health status could change over time. That’s something to consider, especially when it comes to protecting your family financially with life insurance coverage.

Accidental death policies have numerous exclusions, such as physical and mental illnesses, that impact millions of Americans. Typical policies exclude things like cancer, heart disease, diabetes, overdoses and suicide.

Let’s consider pricing. A 30-year, $500,000 accidental death policy for a healthy 30-year-old woman is quoted at $30, according to insurance broker Fabric’s quote tool. Limitations would be that if, during that 25-year timeframe, she passed away from an illness or health issue of any kind, the death benefit would not be paid out to her beneficiaries.

For that same woman, same policy amount and same coverage duration, she could purchase a Haven Term policy issued by MassMutual for $30.23 per month. While the accidental death policy would only cover an accidental death or injury, the term life insurance policy would cover any kind of death that life hopefully doesn’t throw her way.

Choosing the right policy type

While the number of policies available can be overwhelming, for many, a medically underwritten term life insurance policy will offer the financial protection your family needs at an affordable price.

What Haven Life customers say about their life insurance rates

Tip #3: Calculate how much life insurance you really need

If you were shopping for a new minivan, you probably wouldn’t drive off the lot in a 2-door hatchback. You also wouldn’t buy a 15-passenger van despite all the extra room you’d have. Why? Because what’s probably most important to you is getting the best deal on what your family actually needs.

Life insurance should work the same way. You shouldn’t pay for $3 million in coverage unless you actually need that much. You also shouldn’t skimp on coverage that’s meant to be your family’s financial safety net.

So how do you figure out how much life insurance you need? Start with this rule of thumb: Your coverage should replace your income for 5 to 10 years. If you earn $100,000 a year, a $500,000 to $1 million in coverage will get you into that ballpark. (And remember, in most cases, life insurance payouts aren’t subject to estate taxes.)

Start with this rule of thumb: Your coverage should replace your income for 5 to 10 years. If you earn $100,000 a year, a $500,000 to $1 million in coverage will get you into that ballpark.

Don’t forget to consider specific financial obligations and lifestyle needs your family has, such as funeral expenses, your mortgage, debts, your children’s educational expenses as they get older, or income replacement you may want to provide if your spouse will likely take time off if you passed away. A life insurance calculator can factor in all these financial considerations to provide a proper recommendation that will suit your financial needs.

The policy’s term length should also be considered when securing adequate coverage at the best price. If the kids will be grown and no longer financially dependent 20 years from now, a 20-year policy may be the right amount. If you have a newborn, a 30-year mortgage, and significant student loan debts, then a longer term length might be necessary. You can usually purchase more coverage when a policy expires, but it costs significantly more. That’s why choosing the right term length – not too long and not too short – will save you money over the long-term.

Quotes for term life insurance

Age Gender Health Face amount Term length Monthly cost
30 Male Excellent $500,000 30 $36.36
30 Female Excellent $1,000,000 30 $54.46
35 Male Excellent $500,000 20 $23.34
35 Female Excellent $750,000 20 $27.49
40 Male Excellent $600,000 15 $26.29
40 Female Excellent $800,000 15 $33.05
Source: Haven Life Insurance Agency (Haven Life)
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Considering the “rule of thumb” for stay-at-home parents

When using the rule of thumb to determine life insurance needs, remember that just because one spouse doesn’t bring in traditional income, it doesn’t mean he or she doesn’t need life insurance.

Stay-at-home parents often need life insurance to cover the costs of the many services they provide for their families. From childcare to home cleaning and management, stay-at-home parents are worth a great deal. In fact, one survey valued stay-at-home moms at more than $160,000 per year in 2019. That value needs to be protected.

When determining the coverage needs for a stay-at-home parent, consider the age of your children, the cost of childcare and future education expenses, and potential income replacement if the breadwinning spouse would like to take time out of the workforce to reduce the number of lifestyle changes for kids who are used to having a parent at home. If that seems complicated, consider buying a policy for the stay-at-home parent that is equal to what the working parent has.

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Tip #4: Don’t pay for unnecessary riders

In addition to altering your coverage amount, you can also customize your policy in the form of riders. Riders are add-ons that address specific situations and may be offered as part of the life policy, or for an added fee. For example, an accelerated death benefit rider allows a policyholder to withdraw a portion of the policy’s benefit early if he or she becomes terminally ill, as outlined in the policy provisions. That way, part of the coverage could be used to pay for medical bills or lost wages as a result of that illness.

Another common rider is one that offers a convertibility feature, which provides you with an option to convert your term life insurance policy to a whole life policy within a specific time period, regardless of the insured’s health status. Some people like the flexibility this rider provides, but for those who never choose to actually convert, it adds to their premium amount per month.

Permanent life insurance policies offer an even greater range of riders, or extra benefits, such as disability insurance. These riders can make permanent life insurance, which is already more expensive than term life, even more so.

Riders address many different kinds of hypothetical situations. When you’re shopping for coverage, it can be tempting to add riders “just in case” it’s helpful down the road. But keep in mind, each rider has the potential to increase your monthly payment, and in reality, there are only so many situations that you will encounter. Be sure you’re adding on riders that you actually think you could need or you’d be glad you have down the road if you want to keep coverage as affordable as possible.

When you’re shopping for coverage, it can be tempting to add riders “just in case” it’s helpful down the road. But keep in mind, each rider has the potential to increase your monthly payment.

Ensuring high quality and affordable protection

Everybody loves a great deal, and thanks to the Internet it’s easier than ever to find one. But remember: information flows both ways online, so it’s also easier than ever for companies to get your attention with a life insurance product that might not meet your needs.

It’s up to you to understand the difference. Are you getting a great price on the policy you need? Or have you found a low price on a policy that will either cost you more in the long run or not provide you with ample coverage? If it’s the latter, cheap life insurance can come at an incredibly high price.

So determine your financial needs. Get life insurance quotes. Compare everything from rates to company ratings (independent assessments of an insurer’s financial strength and claims-paying ability) to actual customer reviews. With a little legwork (and help from your old buddy, the Internet), you can find a policy that is both dependable and affordable.

And, if you’re looking for a place to begin your search, might we suggest here. Check your rate without providing any personal information. When you want more information, our customer support team is (very) friendly and happy to help.

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About Louis Wilson

Louis Wilson is a freelance writer whose work has appeared in a wide array of publications, both online and in print. He often writes about travel, sports, popular culture, men’s fashion and grooming, and more. He lives in Austin, Texas, where he has developed an unbridled passion for breakfast tacos, with his wife and two children.

Read more by Louis Wilson

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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