What Is Your Insurance Worth?
As term assurance has no cash value element, premiums in the first several years are considerably lower than those of a permanent life insurance policy for the same level of death benefit. The agent who sells the term life insurance policy would probably not make enough profit to cover his or her costs for designing the plan and processing your application. However, if he or she sells a $1000 per year life insurance policy they will generally make a profit of between $700 and $1000 that policy. Not bad income for several hours work! This profit margin can lead to increased pressure being place upon insurance brokers or agents to sell more permanent life insurance policies, especially if they could lose money by selling term life polices.