4 Tricks to Save Money on Life Insurance

Life insurance can provide vital protection for loved ones in case of an untimely death. But, those who buy policies will have to pay premiums out of their bank accounts for decades to keep this protection in place. 

Fortunately, there are ways to keep life insurance costs down. Here are four tricks to try to ensure premiums are as affordable as possible. 

1.Give up high-risk habits 

Life insurers assess the risk of having to pay out a covered claim. People who engage in dangerous hobbies such as scuba diving or skydiving are more likely to pass away while insurance is in effect. As a result, insurers may deny coverage or charge much more to people who do high-risk activities. 

Skydivers, for example, might pay as much as $2 to $5 more per $1,000 of coverage even if they jump just a few times annually, while scuba divers could see premiums increase by as much as $10 per $1,000. Some insurers may refuse coverage entirely for those with these hobbies. 

Now, not everyone will give up dangerous pastimes just to save on life insurance. But, anyone buying coverage obviously has loved ones to provide for so it's worth considering whether taking on the added risk of death -- coupled with the added cost of life insurance -- is really worth it. 

2. Maintain your health 

People who have health issues, including chronic conditions, may face higher premiums for life insurance or may not be eligible to get coverage at all if they have a serious pre-existing medical issue.

Staying as healthy as possible, including maintaining a healthy weight and avoiding smoking cigarettes, could be important to keep premium costs as affordable as possible. Of course, it's also beneficial to simply be healthier, so working on maintaining your health can do more than just help reduce life insurance premiums. 

3. Choose term life instead of whole life 

When buying insurance, consumers have a choice between whole life coverage and term life coverage. Whole life coverage costs between five and 15 times more than a comparable term life policy. That's a huge amount of money. 

Most people don't need whole life insurance coverage because insurance is supposed to be there to provide for dependents who rely on their income or services. Eventually, though, kids grow up, mortgages and other debts are paid, and people stop working and no longer rely on their job for income. When this happens, life insurance isn't necessary anymore. 

Whole life insurance would remain in effect indefinitely, so the death benefit would eventually be paid out. It also has an investment component. Term life insurance doesn't have an investment component and is in effect only for a period of time -- such as 20 or 30 years. No death benefit will be paid if the policyholder doesn't die during this period. 

Those who want to keep costs down should almost always opt for term life unless there's a very specific reason they will need ongoing insurance for the rest of their life (such as having a disabled loved one to provide for). There are better options, with fewer fees and restrictions, to invest money in rather than spending extra for whole life coverage.

4. Shop around for coverage

Finally, it's important to shop around to save on insurance. Prices can vary from one company to the next for similar coverage. Work with an independent insurance agent or get several quotes online to compare costs and see which insurer offers the best deal. 

By shopping around and keeping these other tricks in mind, consumers can avoid overpaying while getting exactly the policy terms they're hoping for.