How Often Should I Compare Life Insurance Rates?

If you’ve purchased life insurance, whether recently or some time ago, you might be unaware that procuring a life insurance policy is not a finite process. After all, your mortality isn’t a fun topic to consider. And once you’re done with the “hassle” of getting a policy, you’re probably ready to move on. Many who own life insurance policies likely aren’t comparing rates on a regular basis—especially given that almost 40 percent of Americans don’t have life insurance,

Still, there are viable reasons to look into changing your policy, finding lower rates sitting atop the list.

Staying up to date on rates for life insurance policies is a beneficial habit because insurance companies usually change their rates every year. With these fluctuating rates, you may be overpaying if you fail to regularly compare your rates with those of other insurers.

So, staying current on rates could save you a considerable sum of money. By comparing quotes, you could discover that you can get a lower rate or even increase your coverage for the same cost.

More importantly, the exact same life insurance policy can vary widely between different insurers.

When answering the question of how often you should compare rates, the short answer is “once a year” because this is how often insurers update their rates. And consider reviewing them even though rates do increase as you age because the marketplace can change, potentially giving you favorable pricing for a period of time.

But “every year” is a pat answer. You may want to re-evaluate sooner rather than later. Reasons for doing so include if your health has improved since you first got your policy. In this case, you may be eligible to pay less on premiums.

We’ll dive into more detail about why you should be consistently comparing life insurance rates. And the best ways to do it.

How Insurers Determine Your Rates

After you buy a life insurance policy, you’ll pay premiums to the insurance company in exchange for a death benefit. This will be paid out when you die. Because insurers will pay this benefit, premium rates are based on the risk of you dying prematurely — or before the end of a term, if you have term life insurance.

As a brief refresher, let’s touch on the factors that determine these premium rates.

As with regular health insurance, life insurance companies base their rates on a candidate’s life expectancy, which involves factors such as gender, age, general health, and unhealthy habits, such as smoking and drinking. The cost of premiums also depends largely on your geographic location.

Some life insurance quote calculators will also ask about your hobbies (such as whether or not you participate in high-risk sports), your family’s health history, and sometimes, your history of driving violations.

These factors will determine the cost of your life insurance policy when you go to compare quotes, as well as the type and length of the plan you want to buy.

Tips for Re-shopping for Insurance

To shop for life insurance is to quickly compare insurance rates online. Fortunately, you can knock out your rate comparison in no time from the comfort of your home.

There are a few easy steps you can take to stay up-to-date in comparing rates.

Find a Reliable, Independent Source Where You Can Compare Rates

An online referral service is simple and convenient as you compare multiple quotes. Knowing your medical history, what type of life insurance you want, and your preferred length of coverage will also help narrow down which rates to compare, and what prices will look like.

To start you off on your search, you can get a free quote from SelectQuote.

At SelectQuote, we help you find the coverage that is the best fit for your current situation. We advocate for you, the customer, and don’t lead you to any specific carrier based on commission.

Based on Rates and Needs, Determine If You Want to Keep Your Previous Plan — Or Switch to New Coverage.

For example, most insurance experts will tell you that whole life insurance isn’t for everyone. Check out a recent post where we show a cost comparison between whole life and term insurance.

Still, some people opt for these plans due to the appeal of its cash value or another circumstance that may warrant whole or permanent coverage.

Comparing your needs along with the rates between different types of plans is a good way to determine the right plan for you.

Read The Fine Print

Especially if there’s a large price difference between two quotes on the same policy, be sure to skim through the fine print to ensure you know exactly what you’re buying.

Free Look Period

When you buy a life insurance policy, you will be granted what’s called a Free Look Period. During this time, which often lasts up to 30 days, you can cancel your new insurance policy with no penalty. If you want to change your life policy after this period is over, you won’t receive a full refund.

If you’ve made a recent life insurance purchase, this period will give you extra leeway to review your policy of choice, or to have an outside party review it (such as an agent, company representative, or attorney).

The Free Look Period can also act as a grace period if you need to do more research and review other options—or if you compare rates with other insurers and find another similar policy at a cheaper cost.

A Final Note on Comparing Life Insurance Rates

If you’re a newly minted owner of a life insurance policy, it’s natural to wonder how often you need to check in on the finances around it.

After all, no one wants to lose money on a policy that’s supposed to protect your loved ones from financial loss. As insurers generally change their premium rates every year, it may be wise to compare rates at least once a year so that you don’t end up overpaying your insurer.

A couple final thoughts on selecting your policy:

  • Find a reliable third-party source for calculating quotes from multiple insurers
  • Do your research on different types of plans
  • And read the fine print closely

Re-evaluating rates on your policy can save you a significant amount of money, especially if you didn’t compare rates from multiple carriers for your first policy. If you’ve never compared rates before, it could be that you’re currently overpaying your insurer.

Why wait to see what life insurance rates you qualify for? Act now before rates change. Contact a licensed SelectQuote agent now for a personalized recommendation.

We’ll be happy to help you shop or re-shop for life insurance coverage that best fits your needs.

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