How to Save on Life Insurance

Having a life insurance policy can help take care of your family should you no longer be around to look after them. Of course, life insurance requires a regular financial commitment in the form of a regular premium. If you decide to get insurance, there are many factors to consider that will help you save on your premiums.

We believe every Canadian should only pay for what they need and the quality of service from a life insurance company should meet the demands of daily life. Understanding these factors and tips will help to ensure you can uncover the best Canadian life insurance policy for the right price.

Your personal circumstances are the number one cause of higher premiums, so the most significant thing you can do to save money on life insurance is to be as insurable as possible when you purchase your policy.

Buy life insurance when you're young

If you buy term life insurance, your premiums will be lower when you’re younger. Your premiums remain constant for the term but increase when you renew your insurance policy based on your age at that time. Essentially, if you get a permanent life insurance policy at a young age, you’ll be paying high premiums earlier in life to save on your premiums later in life.

Don't smoke

If you’re not a smoker, your premiums will be lower. And if you do decide to kick the habit, you’ll get to pay less as well but it may take a year before you’ll be able to take advantage of lower premiums. Even if you enjoy the occasional cigar, your costs could be higher because some insurers may consider you a smoker.

Stay healthy

The latest data from Statistics Canada reports that more than 12% of Canadians over the age of 12 were smokers. That means they also have to pay more for health insurance. Some insurance companies also offer lower premiums if you maintain a healthy lifestyle, aren’t overweight, and drink little or no alcohol.

Select the right life insurance product

Back in the 'wild west' days of life insurance sales (specifically, the 1980s and early 1990s) people were losing tens of thousands of dollars, simply because they had been sold the wrong product for them. By picking the right life insurance policy, you'll not only ensure you get the cover you need, but you'll get it at the right price.

Term or permanent life insurance

There are two broad types of life insurance to choose from: term or permanent. Term life insurance is for a specific amount of time (such as 5, 10 or 20 years), whereas whole life insurance is meant to provide protection for your entire lifetime. Premiums on term insurance can initially be much lower than permanent insurance. However, term insurance premiums increase when you renew your policy, whereas permanent insurance premiums stay the same throughout your life, therefore permanent life insurance is typically less expensive than term later in life, due to renewal costs with term life insurance. That said, each person has different needs, so it’s best to lay out a life insurance plan with a professional.

Group insurance

If you’re working, you likely have life insurance through work and your employer will often cover part of the premium. This can be a lot cheaper than buying insurance on your own because your organization affords you a discount. That said, if you’re young and healthy, a term life insurance plan could be cheaper. Also, group life insurance might not be enough for your needs. Also, if you’ve downsized or move to another company, there may be a period of time where you have no insurance, as group insurance doesn’t go with you if you leave your job.

As with any product, you save money on life insurance by working the marketplace. This includes everything from shopping around, to purchasing multiple products from the same provider.

Shop around

It’s common to look around for the best deal whenever you buy groceries; the same can be said for life insurance. There are dozens of life insurance companies to choose from. You’ll want to compare life insurance quotes for different types of life policies to see which one is right for you. Speaking with a licensed agent can really help you make that decision.

Buy young

Purchasing a life insurance policy at a younger age, when you are presumably healthier will lead to better pricing and product options. As you age pricing increases to reflect the increased health risks associated with your age group.

Quit smoking and drugs

Any smoking related activity whether tobacco or cannabis, as well as use of recreational drugs will impact your pricing and product options. Depending on your usage you may find it difficult to not only find affordable life insurance, but any form of coverage. You may need to rely on no-medical life insurance.

Bundle and save

When you have phone, Internet, and cable with the same services provider, you’ll often receive a discount. If you have auto and home insurance with the same financial services company as your life insurance, you may also be eligible for a discount—around 10% to 15% off, depending on the provider.

Affinity programs

There are often perks of being part of a professional association or attending college and university, such as getting preferred rates on life insurance, or being included in a group life insurance plan for that organization. Expect a discount of about 10% off.