7 ways to lower life insurance costs

This post comes from Rob Berger at partner blog The Dough Roller.

Life insurance is one of those necessary evils in our lives. As with other insurance products, many of us need it, but we want to pay as little as possible.

It's also a great example of what I call "painless ways to save money." Lowering your life insurance premiums gives you an opportunity to reduce your monthly expenses without changing the way you live.

So I've pulled together seven ways you can pay less for life insurance:

Take a hard look at your finances and determine exactly how much life insurance you need. Consider the expenses your spouse or other dependents would be left with if you were to pass away unexpectedly. If you're trying to cut costs, there's no reason to buy more coverage than you really need.

Buying too much life insurance can significantly increase your costs: the higher the payout, the higher the premium. The key is to get the life insurance you need, but no more.

Apply the same principle to the term length of the coverage you purchase. If your mortgage will be paid off in five years, you may not need the same huge payout for a 10-year term. Remember, the longer the term, the more you pay.

Once you have a number in mind, you may find that you can save money by rounding up. Premium rates for certain levels of coverage often drop when you hit certain thresholds of coverage. Paradoxically, a $500,000 policy may cost less than a $490,000 policy.

Stop smoking and get in shape. When I purchased my term life insurance, I got three times the insurance as a friend of mine, but I paid less. He was overweight, and the result was much higher premiums. If you've lost weight since you bought life insurance, get new quotes to see if you can save some money.

As you're shopping for policies, be sure to check for hidden fees. Some insurers charge extra fees if you pay on a monthly basis rather than yearly. And insurance companies offer add-ons, called riders, that often offer additional coverage you don't need. A few examples:

• Accidental death benefit. If the insured's death is an accident, the payout is increased (often doubled).
• Waiver of premium rider. If the insured becomes disabled, this rider will waive the payment of premiums. This is similar to an insurance policy that pays the mortgage if the homeowner loses his or her job or becomes disabled.
• Disability income rider. With this rider, you'll receive a certain amount of income should you become disabled.
• Term conversion rider. Want to convert your term insurance policy into a whole- or universal-life policy? The term conversion rider gives you that option.
• Accelerated death benefit rider. If you become terminally ill, you can collect some of your life insurance proceeds while you're still alive.

Generally, these riders are a lot like the extras car dealerships try to sell you. Most people don't need them, and they aren't worth the cost.

Stick with term life insurance. There are circumstances when a whole- or universal-life policy is a good option, but for most people most of the time, term life insurance is best. And it's a lot cheaper.

As with any product, you'll want to shop around. Thankfully, most insurers make policy quotes available online. You can hop on the Web and shop for a policy that suits your needs. As you're shopping, make sure you're comparing like policies with like terms. While one company might offer a policy with a lower premium for the same coverage, it may have exclusions that make the policy differ in important ways.

More from The Dough Roller and MSN Money:

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• The pros and cons of whole life insurance
• How to find 'safe' dividend-paying stocks 
• Smart Spending on the go: Get our app for Android or iPhone
• Top 10 life insurance myths