How Not To Save Money On Life Insurance

In Bizarro World, most of us with life insurance feel guilty for paying so little to insurance companies. Budget Life checks in with several ways to allay those feelings of inadequacy by offering some things you can do to fatten up those premiums:

*Gain weight — Life insurers are like airlines in that they charge more to the portly. Since obesity increases your chances of dying quicker, you’ll pay more for insurance.

*Procure a chronic illness — If an ailment is driving you to an early grave, insurers will want you to toss a little more into the hat.

*Get old — If you’re a senior citizen, the post says, most insurers won’t offer you cheaper 20 and 30-year policies, so you’ll have to pay for a more expensive 10-year plan.

*Step up the smoking — If you have a habit of sucking cancer sticks or previously made a routine of doing so, you’ll have the pleasure of coughing up more in premiums along with all that mucus.

*Be a daredevil — If your field of work is risky — say, mining or construction — add “inability to pay life insurance premiums” right after “getting maimed on the job” to your list of worries.

*Lie on your application — If you falsify your application and your insurer follows up years later, finds out you’ve lied and invalidates your policy, you get no money back.

6 Ways to Deny Yourself Cheap Term Life Insurance [Budget Life]

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  1. Liam Kinkaid says:

    Don’t get old, eh? I’ll get right on that one.

  2. smo0 says:

    I don’t remember where I saw it but:

    *Be a daredevil — If your field of work is risky — say, mining or construction — add “inability to pay life insurance premiums” right after “getting maimed on the job” to your list of worries.

    Applied to a few “Sedentary” jobs – I never thought it would…

  3. trentblase says:

    Re: Gain weight – that depends on your current weight I guess… new studies show that overwight (not obese) people live longer. Grain of salt, though.

    • Oranges w/ Cheese says:

      Well considering the way that BMI works (the scale they use to determine if you’re Obese) if you are more than 15 pounds heavier then you “should be” you’re obese. More than like 25 and you’re MORBIDLY obese. Which is ridiculous.

      • grebby says:

        How is it ridiculous? Being more than 25 pounds overweight increases the likelihood that one will drop dead, a.k.a. morbidity. Hence “morbidly obese.”

        Yes, I know the limitations of BMI; one can be overweight and still healthy, etc. That’s why it’s a guideline, not a law of nature.

      • myCatCracksMeUp says:

        huh? How tall are you?

        I’m 5’8″. 163.5 is 24.9 BMI (healthy is 18.5 – 24.9). At 196.5 the BMI would be 29.9 (overweight is 25 – 29.5) So, based on BMI, I could gain 32 pounds from the max healthy weight and still be overweight, not obese.

  4. sirwired says:

    As a random side-note, Term Life insurance is still, by far, the better deal for life insurance for mere mortals. No matter what the slick sales-guy running an “investment seminar” tells you. There are certain rare situations in which whole-life insurance makes sense, but unless you are filthy rich, they simply don’t apply to you. For most folks, whole-life insurance is an overpriced way to purchase insurance; you’d be far better off with a long-length term policy, and invest the premiums you’re NOT spending on whole-life into a low-cost index fund.

    • mac-phisto says:

      …or a retirement account, which could contain a low cost index fund. keep in mind that there are tax advantages to investing in a cash value life policy vs. just investing the saved cash. investing in a tax-deferred retirement account provides some of those benefits, but not all. imo, it makes sense to sit down with someone who knows the relevant tax laws & plan your strategy accordingly.

      • sirwired says:

        The cost hit that comes from typically-expensive whole-life policies often cancels out any benefit to returns you might get from tax deferral. In addition, most people are unlikely to require insurance their entire life, yet with a whole-life policy, you are paying for insurance for that entire time. (Yes, I realize that after a long while you don’t have to actively pay premiums, but at that point you now have cash tied up paying for insurance you probably don’t need. If you want that cash back, you take a big hit.) There Ain’t No Such Thing As A Free Lunch.

        While there are rare situations where they make sense, certainly a fee-only planner is the way to go if you think one of those situations applies to you.

    • lordrefa says:

      As an insurance agent and a reasonably well educated person in the ways of how finances go — everyone should grab a 10-15k whole life policy young to cover burial and a funeral. (Probate can tie up funds far longer than most realize.) Term for protection on everything else is just fine.

  5. ryan89 says:

    If you lie on your application, and they don’t catch it during the 2 year (your state may vary) contestable period, too bad for the insurance company. In the first 2 years the policy is in force, and the insured dies, they investigate the claim including the app. This is to weed out the suicides and people who just found out they have 6 months to live and then quickly get life insurance.

    • keith4298 says:

      There may be a difference between Term and Whole life as well. I have both policies and my broker was very specific. If I lie about smoking, let’s say and then kick off within two years – those pics on Facebook can nullify my payout. If they just catch you within the two years, I’d have to pay the difference of what a smoker’s premium would have been.

      After the two years though – untouchable.

      (p.s. If my insurer is monitoring my posts, I’m really not a smoker – it was just an example).

    • Nigerian prince looking for business partner says:

      Wouldn’t a physical catch most of that stuff?

      • ryan89 says:

        The simple blood screen and physical they do for life insurance couldn’t possibly catch all life threatening diseases.

  6. qbubbles says:

    Serious question here: is employer benefit life insurance a good deal? I keep getting hit up by the USAA people for life insurance, but since I’ve had cancer, I’m “morbidly obese”, and I’m soon to have gallbladder surgery, I doubt I’d get very far with that. I max out my employee benefit insurance and no one cares about the parotidectomy when I was 21, or that I’m healthier than most people my age/size.

    • Dover says:

      Get quotes from USAA and a couple of other insurers and compare them to what your company offers. I was better off with an individual policy, but my wife’s was a better value through work, so it depends.

      • Dover says:

        Also, be sure you’re comparing the same products. My bank is always hawking accidental death and dismemberment policies, which are different from life insurance.

    • sirwired says:

      Even the unhealthiest person can obtain life insurance.

      You may not like the premiums offered, but somebody should be able to write out a quote for you.

      If you need life insurance, you should look at making the financial sacrifices to afford it. If your loved ones could get by without your income, certainly feel free to not purchase such insurance. (I dropped mine when I realized how stupid it was that I had it; I did not then, nor do I now, nor will I in the future, have anyone that depends on my paycheck.)

  7. Traveshamockery says:

    Term life insurance is actually remarkably inexpensive. I was surprised by how low rates were for my wife and I when we got married. Of course, we got in when we were 23, which obviously keeps the rates low.

  8. Orv says:

    *Become a private pilot — Most companies will only write insurance for private pilots if there’s an exclusion for dying in a plane crash.

  9. Happy Tinfoil Cat says:

    Hobbies: Skydiving, SCUBA diving, bungie jumping, hang gliding, base jumping, mountain climbing.
    Car: Rice rocket (modified)
    Occupation: Test pilot

  10. Nigerian prince looking for business partner says:

    I just found out that my employer is dropping our life insurance policy at the end of the year.

    Everything I’ve read implies that a term policy (can) make a lot more sense for most people. I was just wondering if anyone can recommend any insurers. I saw that USAA offers policies.

    Are physicals typically required for underwriting and if they are, who are they typically done by (regular doctor’s office, shady physical clinics, etc.)?

    • Brunette Bookworm says:

      I would say check with who you have other insurance, like auto insurance, as the multiple policies could create enough of a discount that it pays for the life insurance premium. That’s how it worked for me with State Farm.

      • Nigerian prince looking for business partner says:

        Great advice — Thanks! I already have homeowners and auto insurance through State Farm. I should probably give them a call.

        How involved is the medical underwriting? For our work’s insurance we had to go to an incredibly shade “physical only” clinic that was downright disturbing.

        • Brunette Bookworm says:

          So far with State Farm I’ve never had to do any medical exam. When I’ve added more to my insurance it’s been and the time periods they have to do so without having to get a physical.

        • lordrefa says:

          As an insurance agent, the usual industry standard in every state I’ve actively worked in (OH, WV, PA) is that if you’ve gone to the doctor for your regular physical every year or two and are in normal health you won’t have to do anything other than a short phone interview — they’ll just pull your medical files with your GP/family doctor and go with that info.

    • sirwired says:

      Absolutely get term-life instead of whole life. Whole life provides many dubious “benefits” you almost certainly do not need.

      As far as medical underwriting goes: When I signed up for a policy in my early twenties, it just included a short visit by a nurse to my office where she took a urine sample and put some blotches of blood on blotter paper from a finger stick. I have no earthly idea what they were testing for.

      I imagine the amount of medical underwriting does varies by age and policy amount.

  11. jeff_the_snake says:

    buy it for your kids if you can afford it. my grandfather apparently took out a policy on me when i was an infant, and now that i’m pushing 30 it’s kind of nice to know that if i go early i’ll leave behind enough for my girlfriend to pay damn near all of our mortgage off.