How Term Life Insurance Makes Insurance Cheaper

Let's recall how insurance works. Insurance is a pool of money that will be used to pay our subscribers. Subscribers pay into the insurance fund for reimbursement when they suffer the harm they insured against.

For example, if you have car insurance if you get into a crash the insurance will cover repairs.

Now the amount of the subscription is usually a fraction of money that will be paid out if the harm comes. This is because the insurance pool is made up of lots of people, but only a few of them will suffer the harm. As a result, the insurer can profit from his business model.

The risk that a subscriber will get from his insurance is usually low. There is a science behind this: actuarial science. It involves a lot of advanced math. But the basic formula is that the subscribers have low odds of needing the insurance. Therefore the subscription cost is low.

Term life insurance will only pay out if the insured dies within the period insured. Applying the principles of actuarial science: by lowering the period covered, the odds of a claim being made are even lower. This allows the insurer to lower the subscription cost even more.

Remember the reason you have life insurance is for your family. You want to make sure that they will have a little something if something unfortunate happens. NO ONE wants to use life insurance. It is preparation for the unthinkable. Like an umbrella in the summer, you don't think you need it, but you are glad you have it.

Again since the window to claim against the insurance is narrow the insurer can afford to lower the cost of the subscription. Remember you buy life insurance to be sure. So you can get term life. If it expires to get a new one. The savings will more than pay for itself.

At Brad Spurgeon Insurance Agency Inc., we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (409) 945-4746 or Click Here to request a free quote.

< Older Post

Newer Post >

Insurance industry steady going into 2026: A positive outlook for life and nonlife

By Brad Spurgeon • March 18, 2026

The insurance industry shows stability heading into 2026. Contact us for expert home, flood, & windstorm insurance solutions.

How Inflation Is Raising Home Insurance Costs (and What Homeowners Can Do)

March 17, 2026

Inflation raises home insurance costs because it increases the price of labor, building materials, repairs, and replacement after a covered loss. When it costs more to rebuild a roof, replace flooring, restore water damage, or repair storm-related destruction, insurers usually adjust premiums and coverage calculations

Private Flood Insurance vs NFIP: What Each Policy Covers (and What It Doesn’t)

March 17, 2026

Private flood insurance and NFIP flood insurance both protect against flood damage, but they are not built the same way. NFIP policies follow standardized federal rules and coverage limits, while private flood policies may offer higher limits, broader options, and more flexibility depending on the carrier.

Windstorm Insurance “Direct Physical Loss” Explained: How It Impacts Your Claim

March 17, 2026

“Direct physical loss” in windstorm insurance generally means there must be real, physical damage to ..

How Roof Age Impacts Home Insurance Costs (and What You Can Do About It)

March 12, 2026

Roof age can directly affect your home insurance premium, eligibility, and claim experience because insurers view older roofs as more likely to suffer damage or fail during severe weather. In many cases, the older the roof, the higher the risk profile, especially if maintenance is unclear or the roofing material is nea