Most consumers believe that life insurance rates vary from agent to agent or between buying directly from a carrier vs. buying from an agent. However, life insurance rates can only vary when you compare the same product, such as a 20-term life insurance policy, when your comparison is between one specific life insurance company to another, such as Prudential to MetLife.
All insurance rates never vary in cost for the same specific policy design with the same company. Regardless of whether it is homeowners, auto, dental, business insurance, or any other product. This is the law that each state’s Department of Insurance enforces.
Table of Contents
- Life Insurance Rates Are Regulated by Law
- Did You Know Each State Monitors Rates?
- Life Insurance Company Actuaries Develop the Rates
- Watch Out for Fraudulent Website Ads!
- An Independent Agent Can Help Find the Best Rates
- Carrier’s Premiums Are Based On Risk Factors
- Common Causes of Life Insurance Rates Increasing
- In Conclusion
All life insurance rates are regulated by law for your protection. The insurance companies publish the rates. This means they do not vary from one agent to another for the same product.
Your state’s Department of Insurance governs all insurance company activity.
Life insurance companies do not take it upon themselves to design the product, set a premium, and start selling it. Instead, they have to present the product and its pricing to each state’s Department of Insurance to be approved before marketing it to consumers. They must do this for every state they plan to sell insurance in.
Regardless of what form of insurance you want to buy from a given carrier, there is only one set of rates. This process takes months for each product a carrier wishes to sell. If we did not have this regulation, the consumers would be confused and possibly misled, just like when buying a car.
An actuary, in other words, puts the prices tags on all policies.
The insurance company actuaries create their life insurance rates based on life expectancy statistics. Years ago, life insurance companies used to supply agents with rate books. Those rate books are thankfully history, and now we use modern quoting engines which are always up to date. Today, the high-tech quote engines can compare the rates from over 40 top-rated life insurance companies in less than a minute. This gives the insurance agents all the information they need to decide which company would be the most cost-effective for their clients.
If the wording on a website looks too good to be true, it is probably not true.
There are many misleading life insurance websites statements that have been around for years. The most common of these clickbait ads are “save up to 73% on your life insurance premiums”. These ads appear on many life insurance-related websites and are deceptive plain, and simple. This statement has led consumers to believe these unethical agents can offer you lower rates. This is a form of false advertising, and many people get reeled in like fish.
This is simply a form of deception and false advertising to mislead the consumers into believing they can apply for “discounted rates,” and nothing could be farther from the truth.
Independent agents are otherwise known as Brokers and represent many life insurance companies.
An experienced independent agent can get you pointed in the right direction and help you choose the right product for your needs. When working with a knowledgeable agent or broker, purchasing life insurance should always be a simple job.
Trying to do the shopping by yourself will not work because of all the technical factors you must understand. For example, life insurance, in reality, is one of the most simple forms of insurance. But unfortunately, most consumers make it very complicated and confusing. That is why having an experienced agent to guide you is so important.
How high or how low the risk determines the cost of the insurance product.
Some carriers will be more competitive than others concerning face amounts, term periods, age groups, tobacco use, and other variables. The premiums for life insurance for smokers can be over 300%, especially for cigarette smokers. One carrier, for example, will have lower, more competitive rates for smokers than another.
There is no such thing as anyone company having the lowest rates. They all spend a large sum of money each year, having statistics created to answer many of their questions on how much they believe they should charge for every plan designed for each age group.
All these conditions below can impact your life insurance rates.
- Medical-related health conditions – learn more!
- Hazardous Occupations – learn more!
- Dangerous hobbies & sports – learn more!
- Serious motor vehicle report violations
- Tobacco use (mainly cigarettes)
- Premature death Cancer & heart disease (parents)
- Credit history issues
Take your time and understand the many types of life insurance products. Don’t let anyone rush you into buying life insurance, either. We can help make shopping for the best plan design easy. We are always here to answer any of your questions and help you select the best policy for your specific needs and budget.
All the best,
If you have any questions about life insurance rates, contact us today to help you with no cost or obligation. We are brokers and work for our clients, not insurance companies. Our job is to help you get approved for the best policy for your needs with the lowest rates. You can also set up a time at your convenience to talk.