Even as downsizing and consolidation afflict other segments of the financial sector, the market for term life insurance has become increasingly competitive. This is good news for consumers; policy premiums continue to drop as actuarial models improve and life expectancy increases.
Then again, the sheer variety of available term life insurance policies presents the average risk-management shopper with a baffling buffet of coverage options. As of 2011, there were over 900 life insurance companies in operation in the United States. The combined value of their underwritten policies approached $19 trillion, a staggering sum that exceeds the value of the country’s gross domestic product by several trillion dollars.
Will my Policy Always Be the Same Price?
While nearly all American life insurance companies use the same “mortality tables” to predict their policyholders’ life expectancies with remarkable precision, rates on otherwise identical policies often vary markedly between firms. This can be due to differing cost structures or specific areas of focus. For instance, some life insurance companies cater their services to older individuals while others prefer to deal with healthy, low-risk young people. In any event, customers who compare rates may end up saving hundreds of dollars per year.
How Can I Find the Best Price?
The average person simply does not have the time or resources to vet hundreds of life insurance companies and make an educated purchase. Fortunately, an entire cottage industry has arisen to take care of the legwork associated with insurance shopping.
Most of this activity takes place online. Many insurance providers, especially those who provide auto coverage in addition to home and life insurance policies, have supposedly non-biased comparison tools built into their websites. These tools do often direct potential customers to competitors’ sites.
Talk to a Broker
Finding the best price for your insurance plan can be difficult. Speak with your agent about policy options if you are worried about factors that may affect your policy price, whether it be health problems, a risky job or troublesome credit. Using a third party, like a broker, allows you to tailor your search to your unique situation.