Cheapest Life Insurance

1 .What factors affect the cost of life insurance? What does it mean to have cheap life insurance?

Life insurance has three main contributing costs. First is the cost of dying. Mortality tables predict the amount of claims the insurance company is likely to pay in any year. The carrier must be adequately funded to meet these obligations. The second cost is administration. The carriers have to provide services, underwriting, claims, recordkeeping and marketing. It is important a carrier have a constant flow of new business to keep the company viable as the population of insureds age. The third expense is the investment costs. Carriers are dependent upon sound investment results over long periods of time. Unlike many investment companies, insurance companies have to deliver benefits 50. 60. 70 years from the inception of the policy. The cost of investing large amounts of capital is significant if the carrier is going to meet the obligations.

2.What is the best strategy to find cheaper rates on a life insurance policy?

Looking at the three factors, mortality, admin and investments, it is clear there are very little differences at a macro level. Certainly, an insurance company can move these costs around, but they can’t avoid them. Low cost means the carrier is sacrificing income in the near term, but will have to make up for in the long term to balance the scale. There is nothing for nothing. The key here is to buy from a carrier with a proven track record of honesty and integrity.

3.What types of life insurance policies are the cheapest? Why?

Cheap is different than lowest cost. Cheap may mean minimal services, poor investment results and perhaps the company is underfunding their reserves. Lowest cost simply means the costs are being shifted to a future date. In reality, there is no benefit from buying the lowest cost. The discerning buyer wants to purchase from a qulity agent representing a qulaity company. Over time, this will pay big benefits.