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Types of carriers

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Types of term life insurance carriers

Let's look at different types of carriers

We're going to try and address the different types of term life insurance carriers without strange terminology and eye-glazing verbiage.  Like we said...we'll try.  The term life market is such that the type of insurance carrier isn't so much of a concern but for those that are brave and intrepid enough...let's look at the different types of insurance carriers.

Again, term life insurance has really become a commodity over the past decade.  This is great news.  It really narrows the decision making to cost, amount of coverage, length of term, and the financial strength of your term life insurance carrier.  Whether your carrier is structured as a Stock or Mutual carrier becomes less of an issue as the ability of that company to pay benefits during the course of your chosen term.  That being said, let's look at the types of carriers.

Stock Life Insurance Company.  This is model is your typical insurance company listed on stock exchanges.  The stockholders fund the capital to offer life insurance policies to members and expect to make a profit typically in form of dividends.  The stockholders are usually not policy holders and the venture is primarily driven by a profit motive.  This is not necessarily a negative as your primary concern is to find the best-priced life insurance policy with a strongly-rated insurance carrier through our term life insurance quoting tool.  This may be a Stock life insurance company model in the end.

Mutual Life Insurance Company.  This model is structured quite differently although it can also be a corporation.  With the Mutual Life model, the policy holders essentially own the company.  The company is not in business to make a profit.  There is a board of directors that manages the affairs of the company but any additional money collected in the form of premium above what is paid out as benefits will be returned to the policy holders as "over-charged" premium. 

These are the two large models for life insurance carriers.  There is not really a benefit to a person shopping term life insurance between the two models.  It really depends on your particular situation (age, amount, length of term) as for a given person, one carrier may be superior over another one (regardless of type of carrier). 

Government plans.  The government is less of a factor in the term life insurance market as compared to other types of insurance (health, disability, etc).   Government usually comes into play where there is little market for private (be it Stock or Mutual) insurers.  Health insurance for people over age 65 is a prime example.  Health expenses tend to double with each decades of a person's life.  Qualifying for health insurance would likely be an issue for many older Americans or the cost would we prohibitively expensive.  Life insurance, so far, hasn't fallen under the increasing arm of government.

There are other types of insurance carrier such as Reciprocal and Lloyd's of London but these are not as significant in the term life insurance market.  Again, we recommend other factors to consider when purchasing term life insurance than the type of insurance carrier but we aim to provide all the information to you.


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