5 Things You MUST Know About Life Insurance Before You Buy

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Before you buy life insurance, here are five lesser-known tips you really should know.

These will help save you hundreds of dollars and lots of hassle.  

Here's what you need to know:

#1 - Term Life Insurance Is (Almost) Always the Best Choice

If you're looking for financial security for your family at a great price, term life insurance is your choice.

You've probably heard a radio commercial that says:

"Joe, who is a 40-year-old non smoker in good health, got a $500,000 policy for just $23 per month"

That's an ad for TERM!

There are two major types of life insurance:

  • Term life insurance - lowest cost option, provides coverage for 10 to 30 years, premiums stay level during the "term"
  • Whole or Universal life insurance - costs up to 20x more, has an investment component, designed for lifetime coverage


When to Buy Term Life Insurance:

  • Provide for Family - Your spouse and/or children depend on your income
  • Debt Payoff - Pay mortgage or other debts at death
  • Fund a Funeral - You can usually buy term up into your 70s

When to Buy Whole or Universal Life:

  • Estate Planning - Such as to fund a trust or leave an inheritance
  • Charitable Planning - Leave an endowment to a charity
  • Fund Retirement - these policies have a savings component

The truth?

Very few people need whole or universal life insurance.

We believe only very savy investors and people with estate planning needs should buy whole life insurance.  

Our advice?  

If a salesperson has tried to convince you to buy whole life insurance and all you need is term, say "no thanks" and buy term instead.  

Note: Our #1 choice for term life insurance is Ladder Life Insurance

#2 - when to use an independent agency

In the section above, we recommended Ladder Life.

But if any of the following apply to you:

  • You smoke (tobacco or marijuana)
  • You have any health condition (from high blood pressure to asthma to diabetes or heart disease)
  • History of cancer or heart disease in your family
  • You travel outside the US
  • You participate in hazardous activities (parachuting, hang gliding, rock climbing, auto racing, etc)
  • Over 70 years old
  • Or if you're overweight

... then in that case, Ladder may not be the best company for you.

Shortcut:  Our #1 choice for life insurance with health issues is AIG Direct.  If you have any history of heart disease, diabetes, cancer, stroke, or obesity, click here for a free quote.

You see, every company treats all of the issues above differently.  

Some companies might charge you 50% more if your mother had cancer. Other companies may not penalize you at all.

Some companies make you pay smoker rates if you smoke cigars or marijuana.  Some companies will let you pay non-smoker rates.

The trick?

Get a quote from an independent agency like AIG Direct.

Independent agencies can shop from multiple companies for the best price for you.  

So if you have a special circumstance, like you're 50 lbs overweight or you travel to Israel twice per year, companies will vary widely on how much they'll charge you, so you really an agent who has access to multiple companies to match you with the best fit.

Pre-existing health conditions? 

Don't worry.  AIG Direct specializes in insuring people just like you.  From high blood pressure to diabetes, AIG Direct has seen it all and has the absolute lowest rates.  Click below to see if you qualify.

Quotes are quick, easy, and free! 

Check Life Insurance Off Your To-Do List 

Our top 10 picks for quick, convenient life insurance coverage.  Our favorites are the "no-exam plans" with great rates up to age 60.

Quotes are quick, easy, and free! 

#3 - Consider Starting with a "No Exam" Plan

Once you've chosen the right type of life insurance, you'll need to decide how quickly you want coverage.  There are two basic options when you apply for life insurance:

  • Take an Exam - Usually gives you the best price but requires an abbreviated medical exam in your home.  (Typically includes blood & urine sample)
  • No Exam - May cost 10% to 20% more but is quick and easy with no medical exam 


This decision is about more than "do I want to be stuck by a needle?"  

Taking an exam can actually have dire results:

When I was 27 and in great health (or at least I thought I was), I applied for a Banner Life Insurance policy that required a medical exam.  

I calculated this would save me about $5 per month compared to another no exam option.

I figured wrong!

Skip the Needles!

Want to take the "pain" out of life insurance?  We don't blame you!  Ladder Life Insurance is our #1 recommended no-exam company offering 10, 20, and 30 year plans up to age 60.  See if you qualify for "no exam" today.

Quotes are quick, easy, and free! 

When the tests came back it turned out I had extremely high cholesterol and my triglycerides were pushing 300!  I may have looked healthy on the outside, but Banner Life Insurance found out the truth.

And it cost me...

Instead of qualifying for their best health rating and paying $19 per month, I was penalized two health tiers and ended up paying $29 per month.  

I could have bought a no exam policy for $24 per month from the start and entirely skipped the exam process!

The worst part?

Insurance companies share your medical results with other insurance companies through a central database called the MIB (Medical Information Bureau).  So even if I wanted to try to apply for another company, they would now all know about my terrible cholesterol!

If I had to do it over again...

I would have gotten a no exam policy in place first, and then once it was in place, I would have tried to replace the policy with a lower cost one that required an exam.

That's what I recommend you do.

Lesson:  You never know what lies beneath.  You may feel healthy, but I recommend you look into buying a no-exam policy first, just to be sure you can secure coverage.  Once you have coverage in place, you can look to replace it with a cheaper plan that requires an exam.

Note: Our #1 choice for no-exam life insurance is Ladder Life Insurance.

#4 - get more than one quote

Think about it this way:

You could be paying on your life insurance for 10, 20, or even 30 years or more.  A difference of just 5-10% per month could save you hundreds or even thousands of dollars over the life of the policy! 

It pays to shop!

Here are our top 3 companies:

  1. Ladder Life Insurance - Best for no-exam plans up to age 60
  2. AIG Direct - Best for lowest price or health conditions
  3. Bestow Life Insurance - Best for convenient and simple plans

At Life Insurance Shopping Reviews, we've got over 30 years of combined experience selling life insurance.

We've analyzed and worked with dozens of life insurance companies.  Get a quote from any or all the companies above and rest assured you'll be in great hands. 

#5 - Consider laddering your policies

A great way to save money if you need a lot of term life insurance is to split up your coverage into two policies.

For example, you could save about 20% by getting a 10-year term policy and 30-year term policy for $500,000 each instead of a single 30-year term policy for $1 million.

Just note that the first policy in this case would EXPIRE after 10 years.

So, of course, this only works if you know you'll be ok with that first $500k dropping off after year 10.  

You could use this if:

  • you're paying down mortgage or other debt and won't need as much coverage in future years
  • you've got an inheritance coming prior to the first policy expiring
  • you expect to pay off a debt or no longer have the obligation after the initial term policy expires

You don't have to split up your policies into 10 and 30 year terms, by the way.  You can do any term lengths you like.

Call us if you need help at 888-681-4952.

Written by:  Chris Huntley

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