7 ways to reduce your life insurance premiums 

2. Re-qualify instead of renewing

If you’ve held your life insurance policy for a while (say, 10 years) and want to renew at the end of that term, your premiums will automatically increase based on your age. But if you’re still healthy, you might be able to qualify for a cheaper premium with an entirely new policy.

That’s because policy pricing changes over time based on the insurance company’s ultimate mortality table. If it’s time to renew, but you aren’t as healthy as you used to be, talk to your insurance broker about converting your term policy to a permanent one (more on that below). Just make sure your new policy is in place before you cancel the old one, so you’re not going uninsured.

3. Stay healthy

Among the factors that go into calculating your life insurance premiums, your age and health status hold significant weight, and your life insurer will ask questions about your health when you apply. Since you can’t stop the clock, the best medicine is preventative. Besides quitting smoking, talk to your doctor about the best strategies for losing weight and lowering your blood pressure and cholesterol, if you’re affected by those conditions. 

High-risk hobbies such as skydiving, scuba diving or race car driving could also lead to higher premiums. Making small lifestyle changes won’t necessarily save you a lot of money in the short term, but it will increase the odds of you staying insurable later in life – and staying healthy as you age.

Some insurance companies are even starting to incorporate health incentives their plans. The Manulife Vitality program, for example, gives plan members the opportunity to earn rewards and save on insurance premiums by achieving personalized weekly goals including eating well and exercising, as well as completing health assessments.

4. Switch from permanent to term life insurance 

Whereas permanent insurance policies remain in place for the rest of your life (as long as you keep paying your premiums), term life insurance provides coverage for a specific period of time – typically 10, 20 or 30 years.

Permanent life insurance starts at a higher rate than term insurance because it guarantees a death benefit will be paid out, regardless of when you die. By switching your insurance from a permanent policy to a term policy, your premiums will be lower and you’ll save money in the short term. However, switching from a permanent to term policy could cost you more long term (see below).

Term life insurance is considered a better option if you have a temporary need for life insurance, such as young children and a spouse to support, mortgage payments to make, or if you’re close to retirement.

5. Convert your term policy to permanent insurance 

On the flip side, you can also ask your insurance broker about converting your term life insurance policy into a permanent one. The two main types of permanent life insurance are whole life, where premiums stay level for the rest of your life, and universal life, which combines insurance coverage with investment options and opportunities for tax-sheltered income. Learn more about whole vs. universal life insurance here.

There’s also guaranteed life insurance, where you can receive limited coverage even if you’ve been turned down for traditional policies because of your health. With guaranteed insurance, you can only be turned down because of your age, so you can still get life insurance with a terminal illness.

These options are more expensive in the short term, but may save you money over time, as premiums will stay at the same rate for life instead of increasing sharply with age. To check whether or not a different policy would suit you, compare life insurance quotes today, or speak to you current broker.

6. Combine your and your spouse’s insurance into a joint policy

For married and common law couples, joint life insurance is worth considering. Depending on the age of you and your partner, it may be cheaper to purchase a joint policy, rather than managing two separate policies.

There are two types of joint insurance policies. First, there’s joint first-to-die, which pays out to the surviving spouse after the first dies. With joint last-to-die, the death benefit is paid out to heirs after both spouses die. The two types of policies have different purposes: joint first-to-die is recommended for couples with young children to replace potential loss of income. Joint last-to-die is usually for high net worth individuals to help offset the cost of estate taxes on what they leave their heirs.

Joint policies can be purchased either as term or permanent insurance. Whether a joint policy ends up being cheaper than two individual policies depends on the circumstances, but it offers one major benefit: if one spouse is uninsurable, joint policies are also a way for that individual to gain some kind of insurance coverage (assuming the other spouse is healthy).

7. Shop around

Compared to home insurance and auto insurance, the cost of life insurance don’t vary quite as much between different companies. However, there’s still money to be saved by shopping around to get the best policy for you, especially if a new policy is a better fit for your needs.

If you have a current life insurance broker, they may be able to help you compare other options on the market, though they may only be licensed to sell you products from a few companies. With Ratehub, you can get started comparing life insurance quotes from over 20 companies in just minutes.

Also read:

• How much life insurance do I need?
• 17 life insurance mistakes to avoid
• How to get happier as you get older
• What is life insurance fraud?