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Is Cheaper, Really Better With Life Insurance?

by Scott G on September 1, 2013 · 9 comments

cheap life insurance 2013 better

Is Cheaper, Really Better in Life Insurance in 2014?

In today’s economy everyone is looking to save a buck but not at the expensive of quality.  The good news when it comes to purchasing life insurance is that you will not have to decide between the two.  Life insurance is one of those products where it’s best to shop mainly on price since the quality and security of the product are so heavily monitored and regulated by the state governments.

So is cheaper, better when it comes to buying life insurance? The short answer, in most cases is yes.  Life insurance, unlike other insurances is not subjective. If your car was stolen the auto insurance company may value your car differently than you would.  Life insurance is different.  A life insurance policy is a straightforward contact between you and the insurance company.  It states in layman terms, if you pass away as defined the terms in the policy then your beneficiary will receive the full face amount of the policy.  It is so safe in fact it is often said that a valid claim has never went unpaid!

How Secure Are The Life Insurance Companies?

The insurance industry is one of the most highly regulated industries in the country.  Every life insurance company has to put a certain amount of money aside to pay out future claims.  In addition, all investment activity an insurance company is allowed to make is highly regulated as well. 

Another safety net for all life insurance policy holders is the fact that each state will guarantee up to a specific dollar amount if your company were to become insolvent.  To learn more about your state guarantee funds in the event an insurer fails you can visit NOLHGA.

Rule of Thumb

Make sure the companies you are shopping have an “A” (Excellent) rating or better by the leading independent rating agency A.M. Best.  This will give you the peace of mind that your insurance company is financially strong with an excellent ability to meet their ongoing insurance obligations.

How Cheap is Life Insurance?

To see how cheap insurance is right now, take a look at the rates for a 38-year old female for a $250,000 20-year term policy below:

Preferred Plus
Standard Plus
38 Female$15 month$18$22$28

Wrap Up

With most purchases you usually “get” what you pay for.  However, life insurance is the exception to this rule.  Since life insurance is so highly regulated and every policy will payout a valid claim, shopping based on price is typically the best way to decide.  Just make sure the companies you are considering have an “A” (Excellent) rating or better by A.M. Best so you can be assured you’re choosing the top company for you and your family.

See How Cheap Your Life Insurance Will Be-Choose Your State Below

*Rates as of 09/01/2013. The information in this post is for informational purposes only and is not a guarantee of rates and insurability.  Rates and eligibly are subject to the underwriting guidelines of the insurance companies and state in which you live.