Compare Rates

Life Insurance Rate Bands

Utilizing Life Insurance Rate Bands can Reduce Your Premiums by Over 30%

You must be thinking, what in the world is a life insurance rate band? The insurance companies have beenlife insurance rate bands using them for decades and here is how rate bands work. All the companies use the concept of rate tiers to calculate premiums for life insurance.

These tiers are broken down into batches of 3 to 4 different categories depending on the company. Each of these bands contains a rate per thousand dollars in life insurance coverage. The philosophy is, the more you buy the lower the rate per one thousand dollars of coverage becomes.

If you are looking for low-cost life insurance quotes, this information can help you reduce your premiums. Keep in mind that these are also known as “banded rates”.


How to Use Rates Bands to Your Full Advantage

One of the first decisions a life insurance applicant has to make is how much life insurance does he or she needs. This refers to the face amount otherwise known as a death benefit. This is a number you must carefully choose so you are properly insured. Most of the time, consumers just pull a number out of their heads with little or no thought. I have found that many applicants will ask for a $200,000 face amount. When in essence, a $250,000 will cost less than the $200,000 they just mentioned.

Now keep in mind that this is where their agent comes into the picture. Their agent should help them choose a face amount where a rate band with help them buy more life insurance for less money. We will go into more detail as we move along in this blog post.

The most competitive life insurance companies begin with a minimum face amount of $100,000. If you use a quoting system such as ours and quote $50,000 or $75,000, you are eliminating the carriers with the lowest rates. You are also missing out on the very first-rate band discount.

Examples of Rate Bands

 If you are shopping for affordable life insurance quotes and say you are interested in purchasing less than $100,000 of coverage, such as $50,000 or $75,000. The rates per thousand will be at the very highest point. 

The rate per thousand will cost less if you ask for $100,000 of coverage. This is because the very first-rate band starts at $100,000. This will normally hold for this face amount up to $249,000 in coverage. 

 The next rate tier will normally be $250,000 to $499,000 which will allow you to save more money per one thousand dollars of coverage. A good example at this point is if you are planning on purchasing a $250,000 face amount, you will be taking advantage of the second-rate tier band. You will now be paying even less money per thousand which means you will be purchasing more coverage for less money again and to a higher degree than before.

Let’s Look at the Actual Numbers In Action

We will use an applicant who is 30 years old who wants to purchase a 20-year term policy. He wants to know his options in face amounts and premiums. The applicant asks his agent to give him a term quote for a $200,000 face amount with an A+ rated company.

In this example, we will use the highly rated and competitive Banner Life insurance company for this example. The applicant’s premium would be $191.98 for a $200,000 face amount.

Now Watch What Happens to a $250,000 Rate Quote!

A $250,000 face amount will be $193.99 per year in this example. This breaks down to only $2.01 for an additional $50,000 in life insurance coverage. Most of the time the $250,000 will cost less than the $200k policy. This will depend on the specific insurance company.

Here is another good example, a face amount of $400,000 would cost $274.38. A bump to $500,000 would cost only $318.99 which would break down to an extra $100,000 of coverage for only $44.61 per year. Sound good? you bet it does.

The last example for you would be. If this individual was interested in a $900,000 20-year term policy from Banner Life, the premium would be $526.18. A simple face amount increase to $1,000,000 would be $563.99.

This would represent an additional $100,000 in coverage for only $37.81 per year. This means $37.81 for an extra 100k a year, not a month. You can now see how rate bands can make huge savings in premiums.


A $1,000,000 Face Amount Will Generate an Even Greater Savings

A $1,000,000 face amount is much more affordable than you would think due to even additional rate discounts. If we take a look at this final breakdown of premiums, we will see a rate of 96 cents per thousand dollars in coverage vs. the first quote of a $200,000 face amount.

This last quote of a $1,000,000 policy would break down to a rate of $.37 per thousand. This is close to 1/3 the cost between these two face amounts. To summarize the premiums, we went from a rate of $.96 per thousand of life insurance coverage to $.37 per thousand by taking advantage of the rate band effects.

Taking advantage of the rate bands can make a considerable difference in premiums dollars and allow you to buy more life insurance for less money. We always consider this when we are working with our clients. This is one of the many ways and advantages an independent agent can help you secure the best policy for the lowest premium.


Saving Money Is the Name of the Game!

Purchasing life insurance is just like any other product or service. You simply don’t want to pay any more than you have to. Using life insurance rate bands to your advantage is one way. Another way is to make sure you choose the best life insurance company for your needs and budget. The premiums vary from one company to another so that means you have to shop the market and make sure to choose the carrier that will offer you the lowest rates available. This will mainly depend on your health history.

This is why the most important asset you will have is the agent you are going to be working with. Paying a life insurance premium is not a one-payment event. Payments are due year after year just like a mortgage, that is why you have to get the lowest premiums possible.


Three Main Types of Life Insurance to Consider

Your three main options to consider will be:

You should always know what your options are so you can make an educated buying decision. All three of these types work the same way with rate bands. You can click on the links to learn more about each type of product.

To cut through all the smoke-related to the different types of life insurance. You will find that affordable term life insurance will be the most cost-effective with no close second.

Keep in mind that Whole Life insurance is no longer cost-effective by today’s standards. Universal Life is the number one product for permanent life insurance products. Term Life insurance is the most purchased life insurance product due to its very affordable premiums.


Your Time Is Valuable So Put It to Good Use!

Most consumers go on the internet and bounce from one website to another looking at premium quotes. The one very important concept you need to keep in mind is life insurance rates are regulated by law.

This means no agent or broker can sell the same insurance product from the same carrier for more or less than another. Consumers also compare term life insurance quotes from multiple website quote engines when the rates are all the same.

All they end up doing is getting more confused each day until many of them just give up on the whole idea of purchasing life insurance altogether.


Become a Smart Life Insurance Buyer

Like the telephone companies used to say “let your fingers do the walking”. Pick up the phone and call an independent agent (hopefully us) and let us do all the work for you.

Instead of getting more and more confused looking at numbers and companies, you don’t understand, ask for help. A professional can point you in the right direction in just minutes.

If you have any medical conditions your agent can run a quick medical pre-screen before you apply so there are no surprises later. Many agents will not take the time to pre-screen potential applicants and the result can be an unwanted surprise.


Use Our Websites Quoting System to Compare Rates

Our quoting system will display over 40 of the highest-rated life insurance companies in less than a minute. It will also help you visualize life insurance rates, bands when you compare face amounts. You will need help choosing the right company to eventually apply with but your agent can help you choose the right one.

The most important issue will be choosing the carrier that will provide you with the best health classification and we can help you with that right over the phone. Choosing the right carrier is critical when shopping for the best life insurance rates.

All companies underwrite applications differently so choosing the correct company to fit your specific profile is very important.


In Conclusion

Having a lot of questions is perfectly normal so don’t be afraid to ask. You are welcome to call us toll-free 7 days a week for answers to all your questions. If you decide to apply, we use simple and quick telephone applications to make the job simple. I hope this blog post explaining how life insurance rate bands can reduce your premiums helps you. Keep in mind that there is no cost or obligation for our help. Check out our getting started page for more helpful information on applying for life insurance.

All the best,
Jack Venturi

Take a moment to set up a time to discuss how simple it is to apply for life insurance and get the best rates possible at your convenience.


Jack Venturi Independent Life Insurance Agent

Jack Venturi

Independent agent and founder of

Jack Venturi has over 30 years of experience selling all forms of individual and commercial insurance including Property & Casualty, Health, Disability and Life insurance. Jack has helped thousands of people all across the United States purchase the best life insurance products at the lowest possible premiums over the phone (800)-897-5699 and online.