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Shop Around for the Best Life Insurance Rates

Paying too much for your life insurance policy? It might be time to shop around.

Compare rates from multiple insurance companies. Insurance companies use the premium that you pay to generate income in other investments. If they can earn more money in the investment vehicles that they choose, they will be a little more aggressive in pricing of a life insurance policy.

When interest rates are higher, you can usually find a better rate. The insurance companies are generating more from your policy premium and will be willing to rate the policy aggressively.

However, if you are getting a quote from a company who has a very low premium, you should research the financial stability of the company using a third party rating agency such as AM best, Standard and Poor's, or Weiss Ratings. If a company is offering a low premium, or a high return (whole life), be sure they company is stable and is going to be around when it comes time to pay a claim.

If you are switching life insurance companies, be sure you get approved for your new policy BEFORE you cancel your current insurance policy. You could have a health problem you don't know about that would cause a company to deny new coverage. An existing life insurance policy will stay in place since your are underwritten at the time you apply for the coverage.

You might not be able to medically qualify for life insurance from another company. Be patient. Get approved for a new policy, get the policy in your hands, and then cancel your current one.