Refinance Your Life Insurance Policy

If you have a term life insurance policy, you’re probably overpaying on your premiums. For the last ten years, term life rates have been falling consistently. In fact, many experts believe term life premiums have hit historic lows. While the average American homeowner refinances his or her mortgage every four years, the thought of refinancing a life insurance policy doesn’t even occur to most consumers. Given the unprecedented low rates available, this is a costly oversight. In this post, we’ll tell you how to take advantage of record low premiums by refinancing your existing life insurance policy.

Lower Premiums Are Possible

Here are a few signs that you might be missing out on a better deal on life insurance:

• You bought your policy some time ago. With today’s low rates, you can’t automatically assume that because you’re older, your policy will cost more. More competition among life insurers coupled with lower mortality rates have made it possible for you to pay less for a policy at age 40 than you did a decade ago at age 30.
• You bought your policy through your employer. Employer-subsidized coverage may offer some savings, but it’s not always the best deal. Especially for people who are young and healthy, getting life insurance coverage through your employer might actually end up costing you more. This is because you will end up paying for coverage for the older, sicker employers with your premiums.
• You don’t qualify for the best rates with your insurer. If you only qualify for standard or regular rates with your insurer, you might consider going elsewhere. You may qualify for preferred rates with another insurance company.

Know Your Risk Factors

Refinancing your life insurance policy will require you to evaluate how different insurers treat various risk factors to determine which company will offer you the best rates. Here are some common risk factors that will affect your premiums:

• High blood pressure or cholesterol. Some companies will knock you out of the preferred-rate class for having either condition, while others will overlook one or the other as long as it’s being treated and your current levels are fine.
• Weight. Different insurers have different definitions of “overweight”, so if you fall on the border with one company, see if another insurer offers higher limits.
• Smoking. Most major insurers have zero-tolerance for smoking. However, you might be able to find a company that allows you an occasional cigar without raising your rates.

Additional Resources

• Life Insurance Premiums Continue Downward Trend
• Assess Your Life Insurance Needs