LifeNet Solutions Blog

Cheap Life Insurance - Is It Real?

Posted by Lenny Robbins on Jul 11, 2012 12:44:00 AM

get cheap life insurance and save on your premiumsAll insurance companies are in business to make money.  I know that doesn’t come as a surprise to you.  However, when you think about this, how can one company charge so much less than another for the same coverage?  Is there really cheap life insurance?

Insurance Rates

All of the insurance companies use actuarial data relating to life expectancy based on multiple factors when they determine rates.  Many factors come into play when you are being underwritten for life insurance which is how your rate is determined.  Some of these considerations are:

  • Your build.  (weight as compared to height)
  • Your age.
  • Are you male or female?  (Women generally live longer than men, consequently their rates are less expensive).
  • Your current health.
  • Your health history.
  • Your family health history (parents and siblings usually).

Getting cheap life insurance will depend on all of these factors and more.  It doesn’t make sense that any one company could regularly charge less than the others across the board, because your “risk factors” don’t change.  (And if you see an ad for insurance for $1 per's only for the first month.  After that, it goes up and this company is not usually the least expensive!)

What Insurance Companies Can and Do Offer

Insurance company rates are filed with the insurance commissioner of each state.  Each company sets rates and they are the same from state to state for each policy, rating category, age and amount.  Insurance companies want your business.  If they can’t offer cheap life insurance per se, they offer added value other ways.

  • For term insurance- when you pay annually, or semi-annually the price is less than if you pay monthly.
  • One company offers you a free second medical opinion if you are diagnosed with a serious medical condition after your policy is in force.
  • Permanent Coverage- some companies have a Table Shaving program.  If you are rating should be Table 1, 2, or 3, they will give you a standard rating, which will save you a substantial amount of money.
  • If you would qualify for preferred, but have a medical condition such as diabetes which is well controlled, one company will give you the preferred rating.  (Usually controlled diabetics will receive a standard rating)

These are some examples of how insurance companies add value to their products.  These are not options you are likely to find in your research, either on company websites or quote engines.  You need to consult with an independent life insurance agent who should be aware of these programs and others like them.

The Bottom Line

Is there cheap life insurance?  I guess we could say there is reasonable life insurance.  Sometimes you get a better rating than expected for one reason or another and the insurance is cheap for your situation.  That is an admirable goal.  All we can ask is that we get the best deal we can, and that will always be dependent on your situation and what your agent knows.

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