Young Americans age 18 to 24 are most likely to buy insurance online compared to other age groups, according to a survey from management consulting firm Accenture.
In fact, 39% of youngsters in that age bracket prefer to buy all types of insurance from a website rather than from a traditional agent. Online sales for life insurance were slightly lower (roughly 36%) than web purchases of auto insurance (about 43%).
Based on an Ipsos Reid poll, younger Americans look to life insurance for taking care of a wider range of needs compared with older Americans. Those needs include funeral costs, children’s future education costs and several years of household expenses.
Below is a list of average annual premiums per $100,000 of term life insurance. Rates were compiled from Term4Sale®, an independent web quote portal. Sample premium rates are for non-smokers in average health who live in highly populated East Manhatten, New York under zip code 10162.
Annual premiums shown are 20-year level rates. That is, they remain the same for 20 years.
Average Annual Premium Rates for Men Age 24 and Under
The following rates represent the average online premium quote from 17 life insurance companies.
- Males age 18 … US$205.28 per year
- Males age 19 to 24 … $205.17.
Most insurers offer the same yearly premium rate from ages 18 to 24. Some like Pruco Life of New Jersey actually charge a slightly lower rate after age 18.
Sample Annual Cost Savings for Young Males Under Age 25
More dramatic was the spread between highest and lowest premiums in this online quote comparison. Below the highest annual rate is shown before the lowest quote.
- Males age 18 … US$319 (Allstate New York); $159.50 (Genworth of New York)
- Males age 19 to 24 … $319 (Allstate New York); $160 (Transamerica).
Subtracting the lowest rate from the highest premium results in an annual savings of:
- $159.50 (or 100%) at age 18
- $160 (or 99%) from ages 19 to 24.
Even if an online shopper decided to pay the average premium quote, there would be significant savings.
- $113.72 (or 55.4%) at age 18
- $113.83 (or 55.5%) from ages 19 to 24.
Average Annual Premium Rates for Women Age 24 and Under
Young women shoppers can find much lower premium rates online than men can, based in part on longer life expectancies for females.
- Females age 18 … US$170.52 per year
- Females age 19 to 24 … $170.65.
Only a few life insurers raise their annual rates starting at ages 18 to 24. Among those that do, premiums vary by only a couple of dollars as the applicant grows older.
Sample Annual Cost Savings for Young Females Under Age 25
Yet the lowest quoted rate for younger women in this study is less than 40% of the highest premium quotes.
- Females age 18 … US$285 (Allstate New York); $108 (First Central National of New York)
- Females age 19 to 24 … $285 (Allstate New York); $113 (First Central National of New York).
The most inexpensive annual premium represents the following savings compared to the highest rates:
- $177 (or 164%) at age 18
- $172 (or 152%) from ages 19 to 24.
Typical savings by simply choosing the average online quote in our study are also impressive.
- $114.48 (or 67.1%) at age 18
- $115.44 (or 68.1%) from ages 19 to 24.
Best Life Insurance Deals are Online
Based on this brief analysis, it should come as no surprise that close to 40% of tech-savvy youngsters are using the web to buy life insurance.
Over 20 years, the maximum savings per $100,000 of term life insurance is:
- $3,540 for young women, and
- $2,277 for young men.
Those amounts represent a formidable rate of return for a couple of hours searching online for the lowest life insurance quotes.
Sources: This article presents independent calculations and insights based on source data from Term4Sale.com (Retrieved February 4, 2011), Ipsos Reid poll findings titled Americans Attitudes Towards Life Insurance (May 15, 2008), and Accenture US Insurance Consumer Survey (April 2009).
Daniel Workman - A senior business and finance writer who also does French translations, notably international trade and insurance materials.
Comments