30 minutes with my laptop showed me exactly why it’s so important to shop around for life insurance

PFI Disclosure 1

  • Just like any other type of insurance, spending an hour (or less) to shop around for life insurance could help you save. 
  • In about half an hour, I collected quotes from life insurance companies including Haven Life, Bestow, and insurance comparison site Policygenius, where I found the cheapest premiums.
  • For a 20-year, $250,000 term-life policy, quotes ranged from $11.18 per month to $23.40 per month, meaning there’s a potential savings of $2,932 over time for the same coverage.
  • Read more personal finance coverage.

If you’re not shopping around for your life insurance, you could be spending more than you need.

I spent about half an hour comparing life insurance quotes online and found out just how important shopping around can be. I got preliminary quotes from seven companies, which each took me less than five minutes.

I researched quotes for a single, 25-year-old woman in California, looking at $250,000 20-year term policies and $500,000 20-year term policies. While some quotes were as low as $11.18 per month, or $134 per year, one quote hit $23.40, or $280.80 per year.

That’s a savings of $145 per year, or $2,960 over the 20-year life of the policy, and I never would have known had I not shopped around.

I started by looking at some buzzy life insurance startups

In less than three minutes, I had a life insurance quote from online life insurance company Bestow that was very reasonable. Coverage through Bestow would cost an affordable $11.25 per month. An easy slider let me see that it would cost $17.50 per month to increase coverage to $500,000.

With a number to beat, I went to Fabric. Fabric is an online tool for making a will and getting life insurance. When I went to do a quote, I found out that Fabric doesn’t yet operate in California, so it wasn’t an option for my search. 

Haven Life was my next stop, and while it was a close second, it didn’t beat Bestow. For a $250,000 term life policy, Haven estimated $12.07 per month, or $144.84 per year. While that’s not bad, Bestow is still about $10 cheaper per year, and $200 cheaper over the 20-year period.

However, a simple slider on the quote page shows Haven is cheaper than Bestow for a $500,000 policy — coverage is about $7 cheaper per year, or about $130 over the course of the 20-year policy.

I got these two figures in a total of three minutes. If I were to decide on an insurer and complete an application, there’s a good chance the quote would fluctuate by a few dollars as the companies got more information — but the preliminary quotes are a good place to start.

Then I checked out a more traditional insurer

For a more traditional insurance option, I checked out Liberty Mutual and got a quote within five minutes: $23.40 a month for a $250,000 policy, and $22.05 per month for a $500,000 policy. I was surprised to see the larger policy had a lower premium, so I re-ran the numbers and got the same result.

Yes, the policy with more coverage was still cheaper — about $15 per year cheaper. Over the life of the policy, that could mean that you’d pay $324 less for double the benefit. 

But Liberty Mutual‘s premiums were over $10 higher per month than the Bestow policy. For the same $250,000 term life policy, coverage over 20 years through Liberty Mutual would cost $2,960 more than the same coverage through Bestow.

Finally, I stopped by Policygenius and found the best rates yet

Policygenius is a comparison site that gathers information from several companies in one place. In another five minutes, I’d found a new winner.

For a $250,000, 20-year term policy, Policygenius gave good options, including a policy from Transamerica for $11.18 per month. That makes Transamerica about $17 cheaper than Bestow’s $11.25 per month policy over 20 years. Comparable quotes from Banner and Pacific Life also popped up. 

A $500,000 policy with the same information shows more significant savings. Policies from TransAmerica, Banner, and Pacific Life were all priced under $16 per month, about a dollar or two cheaper per month than the same policies offered by Bestow and Haven. 

Policygenius offered the most information for my time, and the best prices available to me. However, had I not taken the time to explore my options, I wouldn’t have known these were the best rates. When it comes to a long-term commitment like life insurance, skipping the shopping could mean 20 years of spending more than you need on coverage each month.

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