Life insurance costs differ significantly – so shop around


No one wants to spend hours buying something that only pays a benefit after it’s gone. But when it comes to purchasing life insurance, you should. Consumers’ Checkbook researchers found huge differences between companies for identical term life insurance policies sold by major vendors.

Two Checkbook staff – a 48-year-old man and a 40-year-old woman – collected quotes from independent agents, major insurers and online comparison sites for 500 term life insurance policies. $ 000 for 10, 15 and 20 years. Both qualify for the best corporate rates (such as excellent overall health, no smoking, and low risk family medical history).

The 48-year-old would pay $ 709 a year for the cheapest policy offered by for a 20-year plan, compared to $ 1,896 per year with Allstate. Over 20 years, the premiums of these companies would amount to $ 14,180 and $ 37,920 respectively, a difference of $ 23,740.

The young woman would pay less for the blanket, but still benefit greatly from the shopping. The cheapest 20-year plan for her was also offered by for $ 288 per year (an independent agent offered the same coverage for $ 290 per year).

Its highest price was that of an agent who sells Erie policies, for $ 780 per year. Over 20 years, these cost differences add up to total payments of $ 5,760 versus $ 15,600, a difference of $ 9,840.

Until November 5, Inquirer readers can access Checkbook’s full life insurance report, as well as all Checkbook reviews and tips via

Websites such as will help you shop quickly; they work with several insurers to report and sell their policies.

The checkbook also checked the rates using,, and Among them, LifeQuotes stood out because it offered consistently low prices and seemed to work with more insurance companies than the rest, all of which were highly rated for financial security.

It is also worth asking for proposals from a few local independent agents. Checkbook buyers have found that they generally offer quick, competitive prices and great information on which companies forgo medical examination and lab work requirements, and which ones make registration and registration easier. approval (some insurers had arrears of several months).

Price comparison websites and independent agents will not provide you with the prices of some major insurers such as State Farm and USAA; they sell coverage through their own agents.

If you can handle an extra 10 minutes of sleuthing, you might as well collect rates on the websites of these companies, as well as Mass Mutual and Nationwide.

Before shopping for yourself, determine the type and amount of coverage. There are two main types: temporary life and permanent life.

With a term life insurance plan, you decide how long the coverage will be and how long to pay if you die within that time. If you buy a plan for $ 250,000 over 20 years and die within those 20 years, your heirs collect $ 250,000; if you are still alive after 20 years, the company keeps any premiums you have paid and there is no payment.

Permanent life insurance policies do not expire after a set period. You pay premiums, often for life, and the insurer agrees to pay your heirs the death benefit on each death.

With most plans, you can surrender your policy during your lifetime and receive a calculated cash value that accumulates based on how much you’ve paid and for how long.

The problem with lifelong plans is that they cost a lot more than they do eventually. For example, the 48-year-old Checkbook buyer can buy a 20-year, $ 500,000 term life insurance policy for about $ 700 per year, but would pay $ 5,000 per year for a 20-year term life insurance policy. permanent life insurance of similar value with a similar death benefit.

Permanent life plans that contain cash value options are structured more like investments than insurance policies, but they offer negative rates of return if cashed in early.

If you surrender a cash value policy in its first two to five years, you will usually lose all or most of the money you paid.

You shouldn’t expect to do much better than breakeven until about 15 years old; respectable returns finally start to emerge after 20 years. Yes, your heirs receive the death benefit if you die during this time, but it is wiser to spend much less on a term life plan and invest your savings elsewhere.

When deciding how much coverage to buy, think about how much money it would take to replace your income and prevent your family from suffering financial hardship due to debts, the loss of any government-sponsored health insurance. employer or increased childcare costs. Some people also add enough to cover mortgage payments and college enrollment for children.

Consider other help your family might get if you die, including life insurance benefits from an employer and Social Security survivor benefits.

Because for obvious reasons your age is a major factor in how much you’ll pay, make sure you get lower rates by buying younger than older. The best rates available today for a 40 year old for a 20 year policy will be much lower than what you will pay while waiting 10 years to purchase a 10 year policy.

Prefer the purchase of a longer term policy. You simply cannot predict what your life will be like in more than 20 years. If, after 15 years of having a 20-year policy, you think it’s a waste of money, you can always cancel it.

While your age, health, and tobacco use will greatly affect company rates, some are more concerned about various risk factors than others. Checkbook found that some companies place little or no importance on dangerous hobbies, and others don’t care much about recreational use of marijuana.

Be honest when answering questions from insurers. You don’t want the company to deny your family a payment after an investigation found you were a secret smoker or a bungee jumping adrenaline junkie.

Delaware Valley Consumers’ Checkbook magazine and is a non-profit organization whose mission is to help consumers get the best service and the lowest prices. It is supported by consumers and does not take any money from the service providers it reviews.


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