Bundling Life Insurance can be costly
Did you know that the only premium that is fixed between life insurance, home insurance, and auto insurance is the life insurance premium? Further, did you know that when you bundle all three insurance policies that only the life insurance premium is guaranteed to stay the same for the term of the policy? That means that the price you lock into on your insurance bundle will probably go up over the years. But as you get older it will make it harder and harder to get a good rate on life insurance.
So what ends up happening is you feel stuck with your current policy even though your insurance provider has raised the rates on your home and auto, making what seemed like a great deal at first a total nightmare down the road. For more on why bundling insurance actually costs you more money down the road, please read on.
Dangers of Bundling Life Insurance with Home and Auto
At TermLife2Go we will often find ourselves speaking with individuals who are looking to compare the life insurance rates that they have received from their current insurance provider just to make sure that they are getting a good deal. I am sure you have seen the ad, “Bundle Your Insurance Policies and Save With a Multi-Policy Discount“.
In most of these cases, the insurance applicant (AKA, you the reader), already has a home or auto insurance policy in place and are now looking to add either a term life or whole life insurance policy to protect their loved ones.
Or in other words, you have experience insuring “things” and are now you’re beginning to realize it’s a bit more difficult to insure a “person” than it is a thing.
Why is this?
It’s more difficult because insurance companies are now going to begin to ask a lot more questions. Questions like:
- How old are you?
- What’s your height and weight?
- Do you use any tobacco products?
- Are you taking any prescription medications?
- Do you participate in any dangerous activities?
- Has anyone in your immediate family ever suffered from a heart attack, stroke or cancer before the age of 65?
- Etc, etc..
The insurance company may also require that you take a medical exam and release your medical records to their underwriting department prior to being approved for life insurance!
Now this may all seem pretty excessive, especially for someone who is young and healthy. However in truth, these types of questions and medical exams are very typical during most life insurance applications.
Ok, ok… So far so good, now what’s wrong with bundling my insurance?
The problem with bundling when it comes to LIFE INSURANCE is that essentially it takes advantage of the consumers trust in their insurance agent.
What “bundling” will typically do for the consumer is lower the cost of the home and/or auto policies as a result of adding at term or whole life insurance policy.
Sounds great! So what’s the problem!
The problem is that there isn’t a discount associated with the life insurance product! Meaning that within the “bundle” only one price is guaranteed, and that is price attached to the “life insurance policy”.
What many will find once they begin to do a bit of comparison shopping is that in many cases, while their current insurance provider offers a really great home and auto insurance rate, their life insurance rates are outrageous!
Ever see the advertisement life insurance companies run all the time…
“We can save you over 70% on your term life insurance!”
Insurance companies can advertise this because it’s true, and it’s typically true because someone is paying way too much on their life insurance so that they can “bundle” their home and auto with it.
So what! I’m still saving money!
This is true, but for how long? Remember only the life insurance policy price is set. This price may be set for a period of time like 10, 20 or 30 years depending on the type of term life insurance policy that you purchase, or it could be set for life as per many whole life insurance policies are.
Only the life insurance premium is fixed. But the home and auto policies prices aren’t set!
Wouldn’t it be nice if we could lock into an auto insurance premium for the next 20 years?
Or how about not having to worry about our premiums going up after an accident or a few speeding tickets?
It would be nice, but the truth is, that just not the case.
Which means, that when you “bundle” your basically agreeing to lock into three different policies whereby you only have control over one of the policy premiums.
“We’ll if the insurance company raises the price on my auto or home insurance, I’ll just leave!”
Sounds good, but did you know…
That the cost of life insurance is largely based on age? Which means that as you grow older, unless you have a fixed life insurance policy in place, the starting cost of a life insurance could go up each and every year!
Now we say “could go up” because there really isn’t much of a cost difference between a 21 and a 22 year old applying for life insurance.
In fact, there may not be any cost difference at all. However it’s a whole different story when we are talking about someone who is in their late 30’s, 40’s and 50’s!
When it comes to life insurance, if you choose to move your coverage from one insurance carrier to the next, you’ll still have to go through the entire application process again!
But this time, you’re going to be older, that’s a given, but you may have also:
- Gained weight.
- Started taking a few prescription medications.
- Been diagnosed with:
- High blood pressure.
- High cholesterol.
- Etc, etc…
Or you may have suffered from something more serious! In these situations, not only may you find it more difficult to get a really great rate on life insurance, you may find it’s impossible to find coverage anywhere! Which is why bundling your life insurance with your home and auto insurance policies is such a bad idea.
TermLife2go is an agency that works with dozens of top rated life insurance companies. Our #1 priority is to find you the best company at the best price…for you! That means we tailor a policy specifically to you because no two clients are alike.
The application process for any life insurance policy is completely free to you whether you choose to accept a policy with us or not. So what you you have to lose? Give us a call today and let us leverage our expertise for you and see if we can’t save you thousands of dollars on life insurance.