Life insurance is a good thing. According to Gateway Financial, it can provide cash to offset the financial consequences of the death of the insured, it receives favorable tax treatment, and a cash value life insurance policy can serve as a tax-favored repository for funds that can be accessed easily if the need arises.

The main disadvantage of life insurance is paying the policy premiums, although they are more affordable than many people think, as stated by GEICO. If you are considering buying a life insurance policy, it would be wise to plan and prepare. In many cases, there are steps that can be taken to qualify for lower rates.

If you are a smoker, probably the most significant step you can take for lower life insurance premiums is to quit smoking. As covered in an article on Money, smokers pay approximately 3 times as much for life insurance as nonsmokers. Men who smoke spend an average of $1,455 more a year, and women who smoke spend an average of $1,071 more a year for long term life insurance, according to the Money article.

In fact, quitting smoking is a sound financial decision all around. As covered in an article on NerdWallet, a smoking habit is costly in several different ways, including higher health insurance premiums and lower salaries, at a total average cost of around $10,000 a year.

A Kiplinger article offers tips on how to get the best life insurance rates. In addition to quitting smoking, the article recommends that you:

  • Apply for life insurance when you are younger, as age is a major factor in the rates.
  • Get a physical before you apply for life insurance to find out if you have high cholesterol, high blood pressure, or any other treatable condition, and start taking medication to get it under control.
  • Shed some pounds if you are overweight. Insurers take weight into consideration for life insurance.
  • If you have a family history of heart disease or cancer, shop around for an insurer with more lenient standards.
  • Driving records affect life insurance rates. Most insurance companies will ask about any moving violations in the last 3 years or any DUIs in the last 5 or 10 years. If you had more than one speeding ticket within the past 3 years, it might be to your advantage to wait to apply for life insurance.
  • A high risk job could raise your life insurance rates. If you have such a job, consult with a broker who knows which companies insure people in high risk employment.
  • Credit history affects life insurance rates along with everything else these days. If your credit record has problems, takes steps to improve it, or find an insurance company that does not check credit history for life insurance.
Staff (63 Posts)