How to Qualify for Life Insurance Discounts

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Adding discounts to your life insurance policy can save you a bundle, but most carriers won’t work very hard to match you up with discounts.

If you want to maximize your savings, you’ll need to get in touch with your insurance agent or carrier and find out what discounts they offer. To help you get started, we’ve compiled a list of the most common life insurance discounts along with how to tell if you qualify for them.

Insurify has got your back when it comes to life insurance quote comparison. Whether you’re serious about committing to a term life policy or just browsing your options for when the time comes, Insurify’s easy-to-use platform can show you quotes from top carriers in a matter of minutes. Our AI technology will take the elements of your profile and unlock discounts that life insurance carriers offer. Keep reading for more insight into how you can save up to hundreds of dollars on a life insurance policy.

Safety and prevention

These discounts are based on things you’ve done or are currently doing to improve your health. After all, the healthier you are, the less likely you are to suffer an untimely end—and that reduces your life insurance carrier’s risk, so insurance companies are willing to reward you for these behaviors.

  • Non-smoker discount: If you haven’t smoked or used tobacco products in the last several years, you can get a significant discount on most life insurance policies.
  • Exercise discount: Regular workouts can earn you a better insurance rate. Most carriers will ask how often you exercise when you apply for your policy—if they didn’t, let them know you’re fit and see if that will get you a discount.
  • Lifestyle discount: The lifestyle discount often works in reverse. In other words, carriers will raise your rates if you have risky hobbies like skydiving or rock climbing, but they won’t necessarily lower them for not having such hobbies. So if you’ve given up skydiving, definitely tell your life insurance carrier and you may be rewarded with a significant rate reduction.
  • Marriage discount: Studies show that married people live longer on average than singles, so life insurance companies will often give you a better rate if you’re hitched.

Groups and memberships

Group discounts refer to who your friends, family, and community are. Anything from your job to the house you live in can conceivably get you a discount on your life insurance.

  • Professional and organizational discounts: If you belong to certain organizations, such as AARP, or are a member of certain professions, you may be eligible for a discount. Check with your employer, professional organization, and any other group with which you enjoy membership; you can also ask the insurance company if any such discount is available.
  • Military service: Many insurance carriers give substantial discounts to active service members and their families. USAA will only insure military personnel and relatives, and this company is one of the best insurance carriers around.
  • Educator/student discount: Life insurance carriers often extend discounts to teachers and others working in the field of education. Students may also be able to get insurance discounts.
  • Homeownership discount: Owning a home may be enough to get you a discount, even if you don’t have your homeowner’s insurance through the same company as your life insurance. Of course, getting both insurance policies from a single carrier may allow you to combine this discount with the multi-product discount.

Policy-based

The choices you make about how your policy is structured, paid, and renewed may make you eligible for discounts. Your history with a particular carrier can also win you a break on your life insurance rates.

  • Multi-product discount: Many insurance companies sell other products besides life insurance, including homeowner’s insurance, auto insurance, renter’s insurance, and so on. Buying more than one type of policy from a carrier can get you a package rate.
  • Loyalty discount: Sticking with the same insurance company through multiple renewal cycles may get you a better rate. Even if the company doesn’t advertise such a discount, it’s worth asking if you can get one.
  • Early signing discount: Some carriers will give you a discount for signing up for a new policy with them while your previous policy is still in effect with a different carrier.
  • Lump payment discount/prepayment discount: If you pay your entire insurance premium upfront instead of breaking it out in two installments, you can usually get a discount on the whole.
  • E-discount: Choosing to go paperless by opting to receive all your insurance communications via email will often result in a small discount.
  • Automatic payments: Many carriers will provide a small discount for opting to have your insurance payments taken out of your bank account automatically.

Tips for saving money on life insurance

Knowing the common life insurance discounts and checking with your carrier to make sure that you’ve been granted all the ones you qualify for are important first steps, but there are other ways to save money on your life insurance policy.

The single most important thing you can do to reduce your life insurance rates is to shop around at least once a year. Getting a new set of quotes every year will show you just how your current carrier stacks up to the competition, and may also give you the opportunity to score a much better rate.

Even if you like your current carrier so much that you have no intention of changing, those quotes can give you leverage to get a break on your rates. It works like this: find a quote or two that are much lower than your current carrier offers, then call up your carrier and tell them that Carrier X will give you the same policy for $200 less. Ask if they can match that quote. You may not get your carrier to mark your policy all the way down, but you will likely get at least some additional savings on your life insurance rates.

When shopping around for better rates, be sure to use a true quote comparison site and not a lead generation site. The latter are primarily tools for insurance agents looking for leads, and rarely if ever will they give you accurate quotes. A good life insurance quotes comparison site like Insurify will give you real quotes with an “apples to apples” policy comparison.

Second, make sure you have the right type of life insurance policy for your needs. The cost difference between term and whole life insurance policies is vast, and most people are better off with a (much cheaper) term life insurance policy.

Finally, it’s important to remember that price is not the only consideration when choosing your life insurance policy. Some carriers offer superior customer service and will provide options, riders, and discounts that you can’t get elsewhere. These factors may make a slightly more expensive policy well worth the money.

Check out our guide to the best life insurance carriers to make sure that yours is on the list, and if it’s not, consider switching to one that is. Customer service may not matter much as long as everything’s going smoothly, but when disaster strikes and your family needs to file a claim, having a good carrier can make all the difference in the world.

Wendy Connick is the founder and owner of Connick Financial Solutions, a provider of tax and bookkeeping services and a QuickBooks Online Certified ProAdvisor. A long-time freelance writer, she specializes in business and finance articles on subjects including taxes, investing, and retirement. Wendy is an Enrolled Agent (EA), the only federally-licensed tax practitioners who specialize in taxation and have unlimited rights to represent taxpayers before the IRS. She is a member of the National Association of Enrolled Agents and a certified volunteer for VITA (Volunteer Income Tax Assistance), an IRS-sponsored program to provide free tax help for low-income individuals and families.