When you run your term insurance quote, the monthly premiums come across the screen almost instantly.  Are there other fees or costs to take into account when we are considering which term insurance plan we want to purchase?  Let's take a look at potential fees involved in the process of applying for life insurance.

People are usually apprehensive about hidden fees and costs when purchasing anything these days and for good reason.  From baggage on airplane flights to that nasty little data plan needed for your iphone, it seems the upfront cost of any given product or services is only the start!  What about life insurance?   How valid is the quote you received through our life insurance quote engine?  Glad you asked!

First let's tackle various fees.  Most of our term insurance carriers do not have application fees per se.  Application fees are simply amounts of money required to even enter the underwriting process.  We see this type of application fee in some States for health insurance and they usually run around $25.  There is generally not an explicit application fee to apply for coverage.  This is good news since the application fee is usually non-refundable if you decide to stop the process or do not accept the insurance offer that comes out of underwriting.  So that's a good start.

What about policy fees?  Most life insurance carriers have some sort of policy fee.  This can be refunded if you choose not to accept the plan or you are declined during underwriting.  This usually runs from $50 up to $80 annually.  It is generally pre-paid for the year and the first payment is required when the policy is accepted and goes into force.  If you're set up for auto-payment (which we recommend to avoid unintentional lapse of coverage), then it will also be deducted along with your premium payment.  The policy fee is just that...a fee used to administer the cost of the policy as opposed to cover claims originating from the insurance itself.  That job is reserved for the premiums you pay.

If you choose additional life insurance riders, there may be additional premiums associated with these but they are not fees per se...but additional premium.  There may be fees depending on the billing option you choose.  For example, you pay more for a paper billing than for auto-deduction by credit card or checking account.  Yet another reason for the auto-deduction.

There is also something called modal factors which is determined by how frequently you pay your bill.  You will pay slightly less if you pre-pay a full year's worth versus bi-annual or quarterly.  You can go all the way down to a monthly payment but you will pay a premium to do so.  Basically, the more frequently you pay, the more premium you will pay for the same amount of term insurance coverage.  The least expensive option would be annual.  The term life quotes in our engine are usually shown in monthly payment amounts.  You may be able to save a little my paying more at a time.

Outside of these fees or adjustments, the amount you will pay is simply premium for the policy.  This can be affected at the time of underwriting by your health status and/or certain lifestyle choices (such as dangerous hobbies, professions, and/or driving record).  If you have any questions on your particular situations, please feel free to contact us as professional term life insurance agents.