I worked as a life insurance agent for Farm Bureau Insurance for about 18 months. I’ve never been a natural salesman, so that took its toll on my ability to earn income in the profession. I tried REALLY hard to like it, work hard at it, and be successful, but it just wasn’t in the cards. The day to day was filled with writing casualty insurance policies, which in spite of paying out very little, becomes an insurance agent’s foundation as he builds his book of business. The really successful agents, however, know that to make a solid income, they are going to have to sell the other products, particularly life insurance. The problem there is that it can be a hard sell, due to the fact that whole life can be expensive and term life is something they’ll have to pay forever on. Most of my sales were term life sales. Life insurance rates vary based on multiple factors, such as age, whether you are a smoker, and overall health. Most policies require a health examination to gain approval.
Value Penguin did an evaltuation for 2019 Life Insurance Rates based on a 20-year term life insurance policy with a death benefit of $500,000.
As usual they found that generally the increases in monthly premium rates are smaller across when you are younger and premium increases as you age are higher. They gave the example of the increase between ages 25 and 30 being only 2%, but between 60 and 65 rates increased 93%. This is something insurance agents use as a selling point for starting whole life policies at a young age so that they are all paid up by the time you reach those types of increases.
The following table from value penguin shows some of the average life insurance rates in their evaluation.
|Age||Monthly life insurance cost (nonsmoker)||Monthly life insurance cost (smoker)|
|25 years old||$25.67||$86.23|
|30 years old||$26.20||$92.14|
|35 years old||$29.80||$118.36|
|40 years old||$38.14||$183.87|
|45 years old||$59.78||$281.94|
|50 years old||$91.53||$441.69|
|55 years old||$146.39||$689.91|
|60 years old||$245.81||$1076.23|
|65 years old||$473.66||$1,644.78|
As you can see from the table, rates skyrocket particularly high if you are a smoker, especially an aging smoker.
Some of the other points from the study are that men generally will pay 24% higher for term life insurance than women, because men have a shorter life expectancy than women. Also, 10-year policies were cheaper than 20-year policies.
The evaluation also surveyed different age groups, such as Generation Y, X, Baby Boomers, etc. and found that the majority of respondents did feel the best time to buy life insurance was while you are young and healthy. If that is the case, why is life insurance still so hard to sell!?