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 purchase an insurance policy, 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.

When you decide purchase

If you buy term life insurance when you are younger your premiums will be lower due to your age. The benefit of term insurance is your premium remains constant for the entire length of your policy, but they will increase if you choose to renew or convert your life insurance policy as it will now be based on your age at the time of renewal.

If you are someone who prefers to get a permanent life insurance policy, just keep in mind that the cost of the policy is higher than term because it last for your entire life. Your age while a factor, isn't necessarily costing you more money monthly as the premium you pay remains consistent, but the younger you are the more you are committing to paying over a life time.  Some people look at the cost of permanent life insurance as becoming less expensive over time, because if you lock in a great rate when you are young and healthy your premiums won't change over time as you age.

Despite it being a better financial decision to purchase life insurance when you are young and healthy, this doesn't mean you can't purchase at an older age. Many life insurance companies offer seniors life insurance policies. They may have more restrictions on underwriting, coverage limits or death benefit amounts than when you were younger, but it is important to know that you still have options. In fact, you may want to consider long-term care insurance or home car assistance coverage as an add-on or stand alone policy. This product can be purchased at any age, but typically sought after by older individuals.

Personal health and life style choices

Some insurance companies offer lower premiums if you maintain a healthy lifestyle, aren’t overweight, avoid smoking and drink little or no alcohol. The latest data from Statistics Canada reports that more than 12% of Canadians over the age of 12 were smokers. If you choose to live a harsher less healthy life style not only will your life insurance coverage cost you more, you would also feel it in your wallet for any personal health insurance coverage.

Even though a healthy person will pay less for life insurance, you can still seek coverage if you aren't if you have a health issue, as some insurance companies offer pre-existing condition life insurance. Life isn't always fair and it may not be in your control to avoid a life altering condition or illness, just know that there are coverage options available. For example, you can purchase life insurance as a cancer patient.

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 a permanent policy like 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. Since a permanent life insurance policy isn't affected by changes to you or the market while it is active, a permanent policy is perceived by some to be a better long term investment if you plan to have coverage throughout your life due to the renewal costs associated 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

Depending on your employer, you may have a form of life coverage called group life insurance, and it could be paid for by your employer - at least partially. There could also be an option to purchase additional supplementary life insurance coverage that can be a lot cheaper than buying insurance on your own because your organization affords you a discount. That said, you need to review the policy options through your employer and compare them against a personal term or permanent policy, as the coverage provided through work even with a supplemental addition may not be sufficient for your needs. Plus, you need to remember the group policy generally only covers you while you are employed with your company, so if life insurance is really important to you, it might be worth considering a personal policy outside of your work.

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 a no-medical life insurance policy or guaranteed life insurance, which limit the amount of coverage you can obtain due to the lack of underwriting requirements. These policies are less expensive in general due to the restricted coverage amounts.

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 bundled with the same insurer as your life insurance, you may also be eligible for a discount—around 10% to 15% off, depending on the provider. This will depend if your provider offers all of these services, but it never hurts to ask what discount options are available when shopping around.

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.