Most Consumers believe that premiums vary between agents and nothing could be farther from the truth
Without premium regulation, purchasing life insurance would be like buying a used car! The object of this article is to inform you and make sure you understand that. No insurance agent can sell the exact same insurance product for more or less than another. The insurance companies set the rates. You will only see a difference in premiums between one life insurance carrier to another which is perfectly normal competition. Purchasing any type of insurance product shelters you from the nonsense you will find in a car dealership thanks to the protection from the government.
You will never see a difference in premiums for the exact same insurance product with the same exact company between agents. Many consumers today actually believe that insurance is a negotiable product. The agents and brokers have absolutely nothing to do with the pricing of premiums. If one tells you they can, they should be reported to your states department of insurance.
Each and every state monitors life insurance rates and has to approve them before the products can be sold
Life insurance companies do not take it upon themselves to design the product, set a premium for the product and then just start selling it. They have to present the product and its pricing to each states department of insurance to be approved and OK’ed to present to the consumer market. Regardless of what form of insurance you want to buy, there is only one set of rates. This process takes months on end for each product a carrier wishes to sell. If we did not have this type of regulation, the consumers would be totally confused.
A carriers rates are provided to their agents and brokers through software or an online service
Years ago the life insurance companies used to supply agents with rate books. Those rate books are thankfully all gone and now we use modern quoting engines. The high tech quote engines today can compare the rates from over 60 of the top rated life insurance companies in less than a minute. This give the insurance agents all the information they need to make a decision on which company would be the most cost effective for their clients.
Did you ever see an ad stating “Save up to 73% on your life insurance premiums”?
Did you ever see some of these life insurance websites and see a statement such as “Save up to 73% on your life insurance”. This was and still is a statement that has appeared on a number of life insurance agent’s websites. This statement is meant to make the consumer believe that they can offer you lower rates than another agent.
This is simply a form of deception and false advertising to mislead the consumers to believe they can apply for discounted rates. The bad part about it is this misleading statement actually worked well on quite a few saps who sucked this up and bit the hook.
Finding the lowest rates for life insurance begins and ends with the help of an experienced life insurance advisor
An experienced independent life insurance agent can get you pointed in the right direction and help you choose the right product for your needs. Purchasing life insurance should always be a simple job when you are working with a knowledgeable agent or broker. Trying to do the shopping by yourself will not work because of all the technical factors that you have to understand. Life insurance in reality is one of the most simple forms of insurance. Most consumers make it very complicated and confusing. That is why an agent is so important.
All life insurance companies have their own premium structure for each plan design they sell
Some carriers are going to be more competitive that others in respect to face amounts, term periods, age groups, tobacco use and other variables. The premiums for life insurance for smokers can actually be over 300% especially for cigarette smokers. There is no such thing as any one company having the lowest rates in the industry. They all spend a large sum of money each year having statistics created which will answer many of their questions on how much they believe they should charge for each and every plan design for each age group.
Don’t fall for any deceptive advertising stating discount percentages!
Many people because of this actually believe if they shop the market long enough they will find a better price from some other insurance website or agency for the exact same product. Insurance carriers set the premiums which are then supervised and authorized by the state Department of Insurance. Any agent that tells you they can save you more money on the same product is violating the law and simply lying to you.
Life insurance rates are created by the companies actuaries and not by agents or brokers
The fact is the life insurance companies have complete control of an applicants final rates all the way to the point when the underwriting process is completed. Quote engine quoting rates are 100% accurate due to the fact they are updated on a regular basis. The insurance carriers and the quote engines are updated just like clockwork to insurance accurate premiums. When you see rates show under “standard”, “preferred”, or “super preferred” rate classes. They are always totally accurate for those health rate classes if a person qualifies for them.
Common causes of life insurance rates increasing
- Medical related health conditions
- Hazardous Occupations
- Dangerous hobbies & sports
- Serious motor vehicle report violations
- Tobacco use (mainly cigarettes)
- Pre-mature death Cancer & heart disease (parents)
- Credit history issues
Our final thoughts
Take your time and get to understand the many types of life insurance products available to you. Don’t let anyone rush you into buying life insurance either. Any good independent agent will make the shopping for the best plan design easy and straightforward. We are always here to answer any of your questions and helping you select the best policy for your specific needs and budget.
All the best,
*We are here to help you with no cost or obligation. Take a moment to set up a time to discuss your life insurance needs.