Your 5-minute guide to life insurance

How to get a deal

The price you pay depends on your age, health, habits and even hobbies, but there are ways to reduce your rates. You'll likely need a medical exam before being approved for the policy, to rule out risk factors. (See "The lowdown on life insurance medical exams.")

And it might not hurt to check out MSN Money's life-expectancy calculator.

As with everything else, it pays to shop around and negotiate rates. Quotes are available at Web sites such as Insure.com and AccuQuote.com.

Here are more ways to cut costs:

• Ask about discounts. Don't expect your insurance agent to go out of his way to trumpet them.

• Quit smoking and lose weight. You could cut your rates by as much as 50%. (See "10 ways to save on life insurance.")

• Buy coverage in bulk, particularly in increments of $250,000. Oddly, that sometimes costs less.

• Understand how insurance agents and commission-only financial planners get paid: They don't make money unless they sell insurance products. Agents also make lower commissions on term-life policies, so look out for maneuvers to get you to buy something else.

• Clean up credit issues before applying for insurance, because most companies base rates partly on credit history.

Stay ahead of the curve

Life insurance is not a one-time-only deal, so keep these things in mind:

• Don't depend solely on life insurance offered through your employer. You can't count on keeping it should you lose your job or become disabled and can't work. (See "Steer clear of these 7 life insurance mistakes.")

• Watch for hidden fees, including those for paying premiums by direct withdrawal from your checking account.

• Periodically review your policy. The one that fit your family five years ago might not be the best choice today.

• Life insurance settlements, in which policyholders sell their insurance to investors, are a growing trend. But shop around first, beware of high commissions and know the tax consequences of selling your policy. (See "Sell your life to a stranger.")

• Store your policy documents in a safe place, such as a fireproof security box or safe-deposit box.

• To make things easier for your survivors, consider putting your passwords in the same place. (See "Don't take your passwords to the grave.")

• And while making these provisions, be sure your beneficiaries can locate your 401k. (See "You're dead: Where's your 401k?")

Finally, as difficult as it is, talk with your loved ones about your insurance plans. At the very least, tell them which company holds the policy. If they don't know about it, they might never get the money -- and the security -- you wanted them to have. (See "How to collect on missing life insurance policies.")

Updated July 21, 2009

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