How I Saved a Ton of Money on Life Insurance
In Eight Key Factors that Determine Your Long-Term Investing Results, Austin offered this counsel: focus on the factors you can control (such as your overall financial strategy) rather than wringing your hands over things you can't control (such as market performance).
That's good advice, and I want to offer another personal application of it.
Many of us focus on the "revenue" side of our finances (income, interest, investing returns) and don't give a lot of thought to how we can save on the "expense" side. But reducing an expense has just as much impact on the bottom-line as increasing your income, and some expenses may be more "controllable" than you think.
In the October 2007 issue of SMI, I read an article 
about getting a "life insurance checkup." The idea was to pay a person knowledgeable about insurance a flat fee to examine your current insurance coverage and make recommendations about cost and quality.
That made sense to me. After all, my husband and I, with help from SMI, regularly do a checkup on our investments. We also make sure our budget is on track, take our automobiles in for regular service, and have routine medical checkups. Why not have an insurance checkup, too?
So my husband and I contacted the author of the article, Mike Cave, who I had talked to before during the years I worked full-time for SMI. We gave him information about a $100,000 term insurance policy we have as a supplement to my husband's work coverage and waited for Mike's review.
The first shock was that our policy was with a company that was rated as weak by a third-party rating service. We had no idea. The second thing we discovered is that getting the same level of coverage from a stronger company didn't have to cost more. In fact, it could actually cost less!
We also were able to move from a policy that had premiums that increased annually to one with level premiums for the next 10 years.
As the table below shows, over the course of the next 10 years we will save $5,555. And with coverage from a stronger company to boot!
Yes, it did cost us $350 for the insurance checkup (just like you'd expect to pay something for a car tune-up or a medical checkup), but that expense will basically yield a 1500% return over 10 years. Try to get that in the stock market!
But I later discovered that the insurance checkup saved us even more than I realized at first. In the process of rearranging some files, I came across a life insurance quote from several months earlier that I received from the agent who handles our homeowners and auto coverage. We had never acted on it, because we decided to do the checkup first, and frankly I had forgotten about it. The premiums were $234 a month! That was about 75 percent of what we're now paying for an entire year with our new policy!
Having just changed policies as a result of the checkup, the quote stunned me. Now, in fairness, this was a quote for a universal policy, whereas we bought a term-life policy, so it wasn't exactly an apples-to-apples comparison. Still, if we hadn't done the insurance checkup, we might have bought that policy and ended up spending thousands more than we needed to over the years.
There's an old saying that may be true sometimes, but not in this case: "What you don't know can't hurt you." I can say from experience that what you don't know about cost-effective life insurance definitely can hurt you, costing you money that could be better used to save, invest, or give away.
So as you think about your overall financial situation, I suggest you look at the "expense side of the ledger" a bit more carefully. There may be ways you can save hundreds or thousands of dollars, not only on life insurance, but in other areas as well. It will require a little homework on your part, and perhaps a bit of expense, but the returns can be fabulous. 
- Insights from 30 Years in theLife Insurance Business
- Eight Key Factors that Determine Your Long-Term Investing Results
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