Potential clients often call us for tips to save money on life Insurance. As an independent agency with access to more than 45 top-rated companies, this is where we specialize.

Every insurance company sets its’ own rates and guidelines which is why it is extremely important to work with an agency that has access to at least a few dozen companies.

In this article we’ll explain why working with an independent agency is always your best option.  We have also taken the time to reveal a few lesser known industry secrets as well.

Quick Article Guide:

1. Shopping the Market
2. Layering Your Life Insurance Policies
3. Decreasing Your Death Benefit
4. Converting Your Term into Permanent Coverage
5. We Can Help with All Your Life Insurance Needs

Shopping the Market

Many consumers compare pricing before making a large purchase. While this may be a common strategy for buying a car, reserving a hotel room, or purchasing auto insurance; surprisingly, many people never compare rates for life insurance before making a purchase.

In the life insurance industry, every company sets its’ own pricing and underwriting guidelines. Some life insurance companies only want to insure healthy people under the age of 60, while others specialize with insuring people who have serious health issues.

These are just a few reasons why applying with the right company can save you a considerable amount of money. Taking special precautions and doing your research can also prevent your life insurance application from being declined. Instead of applying with your local home and auto insurance agent, consider comparing rates from at least a handful of companies before making a final decision.

By asking a few questions about your build, medications, and overall health one of our agents can quickly compare your unique “risk” profile to each company’s guidelines. Some companies are extremely lenient with minor health issues like elevated cholesterol while other companies tend to offer almost no leniency at all.

In the example below, we’ve compared rates from a 54-year-old man names Edward that called us last year. He had been recently approved for a $500,000, 10-year term from his local State Farm agent, but he was upset because he was approved at twice the cost he was initially quoted.

Edward was in overall good health, but his agent told him that the rate increase was due to his cholesterol of 246.

With some companies, a slightly elevated cholesterol reading would impact your life insurance rates, but with State Farm, this was enough to knock Edward out of their “Preferred Best” rate class for $81.35/month and into their “Standard” rate class for $150.10/month. “This was almost double was I was quoted,” Edward explained, “so I wanted to see if I had any other options.”

Edward is 5’10” and 188 pounds, he does not smoke, and he does not take any medications. After comparing Edward’s cholesterol and health profile against 47 different company’s approval guidelines, this is what we found:

Sample Life Insurance Rates for a 54-Year-Old Male with Elevated Cholesterol

Edward decided to apply with “A+” rated Lincoln Financial because his grandfather had purchased a Policy from them almost 50 years earlier. Even though he decided to pay an extra few dollars a month for a name he knew and trusted, we still saved Edward on his life insurance.

When it was all said and done, Edward was approved at the rate we quoted him, and he saved 58% on the cost of his policy by applying with a company that offers more leniency with slightly elevated cholesterol. To this day, Edward still continues to refer his friends and family to us, thanks Edward!

If you like to compare rates from dozens of companies based on your unique health profile, we can help you too. Give us a call toll-free at 855-247-9555 or request a free instant online quote here.

Layering Your Life Insurance Policies

Do you need more life insurance now than you will in the future? If so, you may want to consider layering or staggering your life insurance coverage instead of buying one large policy to cover all your needs. Layering life insurance is also a common strategy for some who has more than one decreasing debt or financial obligations.

Here’s an example of a client we recently helped:

Dane from Arizona called us earlier this year to purchase life insurance to secure his mortgage, his income, and the cost of his daughter’s college education.

Dane is 49, and he hopes to retire in 20 years. He has two daughters 14 and 16, and he hopes that they will graduate from college within 10 years. Dane also has about 10 years remaining on his mortgage.

Dane makes $73,000 each year after taxes and he has a balance of roughly $150,000 left on his mortgage. He also hopes to set aside at least $150,000 for each of his daughter’s college education expenses.

Let’s consider analyze Dane’s need for coverage…

∙ Replace his annual household contribution until retirement
$73,000 per year – annual mortgage and Dane’s personal expenses (gym membership, medical bills, food, and transportation) = $60,000 x 20 years
= $1,200,000 for 20 years
∙ Secure the balance of the mortgage
= $160,000 for 15 years
∙ Secure his daughter’s college tuition costs
= $300,000 for 10 years

Instead of buying one 20-year term policy for about $1,700,000, we recommended buying 3 separate policies. While this might seem a like a monumental task, it only requires one exam and all three polices are usually approved at the same time.

Here’s our rational:

In ten years, Dane won’t have to worry about his daughter’s college tuition anymore. This amount of years he’ll need to replace his take-home income will also be cut in half. In addition, his mortgage balance should be at least 60% less in 10 years.

This reduces Dane’s need for coverage in ten years by about $996,000
($600,000 income replacement + $300,000 for college expenses + $96,000 mortgage reduction)

After ten years has passed he can’t dramatically reduce his coverage, but he’ll still need to:

∙ Secure the remaining balance of the mortgage
= $64,000 for five years
∙ Provide income protection to until retirement (10 years x $60,000)
= $600,000 for 10 years

After fifteen years has passed, Dane’s need for protection will drop again by about $364,000($300,000 income replacement + $64,000 mortgage paid off)

When his house is paid off and he only needs to protect an additional five years of his income until his planned retirement age.  for protection is income replacement:

After fifteen years has passed, Dane’s only need for coverage is to provide a source of income replacement to his wife until retirement age:

∙ Provide income protection to until retirement (5 years x $60,000)
= $300,000 for five years

Dane is in average health, but he is a type-II diabetic that regularly smokes cigars. Despite his tobacco use, and well-maintained blood sugar, he qualified for the forth-best rates class, “Standard” with one of our “A+” rated companies that is especially lenient with type II diabetes and regular cigar use. Instead of purchasing a $1,700,000 policy for 20 years, here’s what we recommended:

1. A $1,000,000, 10-year term policy (Monthly rate = $213.94)
2. A $400,000, 15-year term policy (Monthly rate = $122.24)
3. A $300,000, 20-year term policy (Monthly rate = $100.89)

This provides Dane’s family with $1,700,000 in protection over the next 10 years. When Dane’s need for coverage decreases over the years, the cost of his insurance, and the amount of insurance he carries will follow suit.

If Dane had purchased one policy, he’d be spending $511.70 a month on coverage, or about $6,140.40 per year. Over the course of twenty years, his cost for coverage would equal $122,808.00.

By laying his protection, Dane’s cost of coverage was reduced to $437.07 per month for the first ten years. After ten years, the cost of his coverage will reduce to $223.13 per month, and after fifteen years, the cost of his coverage will reduce again to $100.89 per month.

By layering his coverage, Dane will save a total of $50,918.40 over the course of twenty years, or about 41%!

If this strategy seems complicated, don’t worry, we’ll walk you through it. You can also consider decreasing your death benefit if your life insurance needs are less complex. We’ve further explained this option in the next section.

Decreasing Your Death Benefit

As we previously mentioned, most people’s need for life insurance coverage decreases as their children move out and their debts decrease. If you need a lot of life insurance now but don’t want to worry about buying a new policy in the future, you may want to consider purchasing a policy that allows you to decrease your death benefit.

Surprisingly, many life insurance companies offer you the option to decrease your coverage, and the cost of your insurance, at least once or more during the lifetime of your policy. This may be a great option to save a considerable amount of money each month in the future if you pay off the mortgage faster than you expected.

Decreasing coverage is also ideal for some divorce decrees and business loans as well. We recently worked with a man who was court-ordered to purchased $2,000,000 of life insurance to settle a divorce decree. Under the terms of the judgment, he could reduce his insurance policy by 10% each year for ten years. By exercising this strategy, he saved about 40% on the overall cost of his life insurance.

Converting Your Term into Permanent Coverage

Instead of purchasing a lifetime coverage or whole life insurance, consider purchasing a term life insurance policy that provides a conversion option. A conversion option allows you to convert up to the entire face amount of your policy before your term ends.

An as example:
Let’s assume that in you are in your early 50s and your debating between buying a whole life insurance policy for $50,000 of coverage and a term policy for $500,000 of coverage.

If you purchase a whole life insurance policy now, you’ll be underinsured, but you won’t have to worry about securing burial coverage later in life. If you purchased a $500,000, 20-year term policy with a conversion option instead, you can reduce your coverage and convert it into a permanent policy later in life, without having to reprove your health or insurability.

For a 50-year-old male in good health, a $500,000, 20-year term policy with a conversion option will cost about $60.00 a month. By contrast, a $50,000 whole life insurance policy for a 50-year old healthy male will cost at about $135.00 per month.

Instead of paying an extra $900 a year to be underinsured, purchase term coverage and convert it into permanent coverage when your need for coverage decreases.

Even if you decide to convert your coverage in the very last year of your term, you’ll probably still end up paying a rate that is comparable to the whole life insurance policy you would have purchased almost 20 years earlier.

In addition, with a conversion option, you do not need to reprove your health. We’ve worked with countless clients who would have been otherwise uninsurable had their existing term policy not provided them with this invaluable option.

We Can Help with All Your Life Insurance Needs

At JRC Insurance Group, we offer our clients more than five decades of combined experience and the best customer service in the industry. Our owner-operated agency only represents “A” rated insurers to make sure we always match our clients with the lowest priced options available from financially-solid, reputable, and reliable companies.

We’ve helped thousands of people with their life insurance needs and we can help you too!

Give us a call today at 855-247-9555 to compare your options for affordable life insurance, or you can request an instant quote by clicking the link below to compare rates from dozens of insurers in less than a minute.