Smart Choices Save Money on Life Insurance

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The following is a guest post by Jessica Bosari. Enjoy!

Smart Choices Save Money on Life Insurance

Life insurance benefits those who are left behind when you pass away, so you want to make sure there is enough money to replace your income each year once you are gone. You want to ensure that your loved ones can maintain their current lifestyle if you pass away prematurely. You don’t want to place them in the lap of luxury (in other words, have too much life insurance) , except in the rare situation where that is indeed the current situation.

Purchasing Term Life Insurance

Permanent (sometimes called whole) life insurance has a cash value, and the premiums are much more expensive because a portion of it goes toward an investment portfolio that can include mutual funds. By passing up the permanent/whole life insurance policies, you can afford term life insurance rates that offer just life insurance without the investment portfolio.

The purpose of purchasing life insurance isn’t to invest money in the various financial markets (you have your retirement accounts for that, after all, and shooting for maxing those accounts out is a perfectly reasonable goal for most people); it is to leave behind enough money that will take care of your family when you aren’t there to provide for them yourself. You can do this for inexpensive rates with term life insurance, and in the process, you will keep the money you would have given to the insurance agent in commissions.


Insurance companies price life insurance by how healthy their clients are. If you are someone who has a weight problem, the insurance companies are going to see you as someone with a lower life expectancy, meaning large sums of money to your beneficiaries when you pass. Insurance companies want to avoid this, so if you are healthy and not susceptible to diseases, the insurance companies can charge you lower rates. If you are overweight, consider taking on a healthier lifestyle to reduce your life insurance costs. Because people who smoke also have lower life expectancies, they get charged more for life insurance. If you quit smoking, your chance of dying early from a heart attack goes down, as will your premium rates. The lower the risk is for your death, the lower the risk is for the agency who insures your and covers your cost of living.


Some professions are very dangerous, with employees who experience more injuries and deaths than most. If you were to leave your dangerous job and begin working in an office, then your insurance rates will decrease. It isn’t nearly as much fun sitting at a desk, but insurance companies like it better when you are safe inside rather than on high scaffolding that you can fall from.

The same activities that help you live a happier, more satisfying life help you to get affordable life insurance. Saving money on life insurance is great, but feeling good is even better.

How about you all? Do you currently have life insurance? If so, what type of policy do you have – term or whole life? Why did you go with the type you chose? 

When you’ve applied for life insurance in the past, what types of details/questions about your life did they inquire about?

Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

  • @ Do you need life insurance?
    • As we’ve discussed several times previously on this site, the first question in tackling the life insurance issue as a whole is to address whether or not you really need life insurance to begin with!
    • Ultimately, if you don’t currently have any children or a spouse that depends on your income, then you’re probably better off waiting to get this form of coverage until such a time arises that it becomes needed.
  • @ Deciding between whole and term life insurance policies –
    • In my mind, deciding between whole and term life insurance is a no-brainer.
    • In almost ALL cases, I would posit that people would be better off buying a competitive term life insurance policy rather than an expensive (often commission-filled) whole life insurance policy.
    • What do you all think?
  • @ How health factors affect your life insurance premiums and benefits –
    • I definitely can imagine how life factors such as health, weight, and job safety could affect the level of premiums one would pay for life insurance.
    • However, it’s interesting that in my experience, I’ve seen that if a person works for a fairly large company that has an established benefits package, you really aren’t asked any sort of health history or risk factor questions prior to signing up for the health insurance and life insurance benefits; they are simply bestowed upon you in a manner dictated by which policy you select.
    • On the other hand, I could imagine that individual health and risk factors come much more significantly in to play if you were to pursue independent health or life insurance policies. 

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  1. I've purchased life insurance before, and it's eye opening when you realize that they're assessing your health to see what kind of risk you are. Really speaks to the importance of keeping healthy in general, and to some extent the financial benefits of it as well.
    My recent post Credit Rating Downgrade and Stock Prices: It was a Money Making Opportunity!

    • Agreed Squirrelers! So just to confirm, you were purchasing this life insurance policy independently from a company, or employer-sponsored, policy?
      My recent post Smart Choices Save Money on Life Insurance

  2. I have term insurance on my wife and myself. We are healthy and do not have any significant medical issues.
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  3. Interestingly, one of the best times to purchase health insurance as a woman is when you are pregnant (and healthy). It's all the OBGYN/hospital visits attesting to your health condition.
    My recent post Comment on Money Making Activities for the Whole Family by Yakezie Carnival October 16, 2011- Growth Edition | My Blog

    • Wow! thanks for sharing Shaun! That's really surprising, but I guess at that point, they know exactly what risks they're exposing themselves to.
      My recent post Easy Like Sunday Morning Weekly Recap and Roundup – # 5 – December 17th, 2011

  4. I am all for the health aspect of life insurance. I think staying healthy is really important and it's a bonus to save on your premiums. When we applied for our insurance we wanted to make sure we were as healthy as we could be because we wanted a good rate. We also work at maintaining this so when we need to renew down the road we are still good to go.

    • Thanks for sharing Miss T! I'm curious – how did your insurance company assess your health? Did they require a physical exam with a doctor?
      My recent post Easy Like Sunday Morning Weekly Recap and Roundup – # 5 – December 17th, 2011

  5. Whole life insurance is a rip-off. It's definitely a scam by the insurance companies. Term is the way to go for sure.
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  6. I hate it how credit cards always hound you with additional life insurance. I mean, its great and all, but with work I have a great plan so I don't need any more. But these credit cards just don't stop calling about it!
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    • Interesting JB! My credit cards have never tried to hound me to get additional insurance coverage! Sorry they are knocking down your door so often! haha
      My recent post Easy Like Sunday Morning Weekly Recap and Roundup – # 5 – December 17th, 2011

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