Can you negotiate Term Life Insurance? That is a great question. Many people think that life insurance companies hold sales, and ads can easily give people that impression. But life insurance actually has set rates, and the only negotiable part may (or may not) be what you are rated.
Most life insurance companies must justify to their reinsurer(s) the rating that they give an applicant, which means sticking to underwriting guidelines. That is why you can often get a better rate by shopping with an agency that carries many different companies, because you can take advantage of a variety of underwriting guidelines and find the one that works best for you.
Sometimes, when a rating is given, extra information can be provided to the underwriter to convince him/her to improve the rating. Sometimes knowing that another company rated you better can help bump your rating up. These are possibilities that could result in you paying a lower price. But how the life insurance itself is priced is not negotiable.
The rates are files in every state for every term life insurance product. What is generally not known is that the health classification is negotiable. Life insurance brokerage firms with an emphasis on underwriting and broad based production can usually work their relationships and use of insurance underwriting credits to their customers advantage.
If you are asking about negotiating rates for individual term life insurance then the answer would be "No". Each life insurance carrier has their own actuarial models they use to develop the rate tables for their products which they in turn file with insurance departments. So, it's pretty much a "what you see is what you get" quoting environment. Sometimes, if you are rated up during the underwriting process because of information gathered from the Medical Information Bureau (MIB) or from results of a medical exam taken to qualify for the coverage and you successfully challenge these decisions (not a real common occurrence) you might see an reduction of or dropping of the proposed risk adjustment. If you are wanting to get the best pricing possible for term life insurance then the best thing to do is shop around among different life insurance carriers.
If you are talking about group term life insurance policies, then if you are bringing enough employee lives to the table and represent enough premium volume to make it worth an insurance carrier's time, you may be able to negotiate a better price or get a bundling discount for purchasing other insurance products from that insurance carrier.
No, the rates for Term Life Insurance are set by the carriers and they are not able to change them at will. However, there are different term lengths, so if you cannot afford the premium for a longer term, you may be able to choose a shorter term, instead.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
All life insurance is about mathematics. The companies deal with a mountain of statistics and design their policies based on hundreds of years of evidence. Their projections are very accurate and they operate on very slim margins. When the company offers to insure you should understand that is their best offer under almost every condition.
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Most life insurance companies must justify to their reinsurer(s) the rating that they give an applicant, which means sticking to underwriting guidelines. That is why you can often get a better rate by shopping with an agency that carries many different companies, because you can take advantage of a variety of underwriting guidelines and find the one that works best for you.
Sometimes, when a rating is given, extra information can be provided to the underwriter to convince him/her to improve the rating. Sometimes knowing that another company rated you better can help bump your rating up. These are possibilities that could result in you paying a lower price. But how the life insurance itself is priced is not negotiable.
If you are talking about group term life insurance policies, then if you are bringing enough employee lives to the table and represent enough premium volume to make it worth an insurance carrier's time, you may be able to negotiate a better price or get a bundling discount for purchasing other insurance products from that insurance carrier.