Life Insurance - When You Pay More Because You Tried To Save
Posted on March 2, 2008 - Filed Under Finance
Life insurance companies make their charges per $1000 of coverage you buy. Have you taken time to ask what you’ll be charge per $1000 if you choose to take on a policy with a certain coverage?
This is an important question you should ask your insurance agent and for very good reason.
In a case study, it was found that a profile pays $249.90 for life insurance coverage of $245,000. But if the same person rather goes for $270K coverage, they’ll pay just $248.40.
That is $25,000 more coverage for lower premiums at the same time. You’ll soon understand why this seemingly incredible thing happens as you read further. This is the reason why you could be paying more for much less…
Rates for given profiles are calculated in ranges. That is, there’s a fixed charge per $1000 for coverage of, say, between $250K and $500K. The charge the insurer in this example places for every $1,000 of coverage between $100K and $249K is $1.02.
However, their charges drop to $0.92 per $1000 for coverage between $250,000 and $499,999. If you choose a coverage amount that is less than $10K less than a multiple of $250K you’ll pay more than if you choose the higher multiple.
Therefore, you’ll get lower rates if you buy $270K of coverage instead of $245K because your premium will be calculated by the rates of a range that attracts lower charges.
You can quickly find out by asking for two quotes from the same quotes site with the only difference being the coverage amount. This is apart from the fact that you’ll lower your life insurance rate if you get and compare quotes from up to five insurance quotes sites.
Get your free, quick and easy, cheap life insurance quotes here…
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Chimezirim Odimba writes on life insurance.
Tags: life insurance, life insurance quotes
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