Insurance Rates, They Can be Very Confusing


Q: Why does one person pay more than the next for the exact same insurance coverage? A: Because of a difference in age, health and lifestyles. Remember when we say the exact same insurance we mean all of the following will be the same:1. Type of insurance2. Age/gender of each person 3. Term or length of time the policy runs 4. Coverage amount

If one person smokes and another doesn't their rates will differ. If one person has a family history of diabetes or some other health related issue and one is in perfect health, there will be differences in their rates.

Q: Why does AAFMAA advertise one rate and then quote me another rate? A: AAFMAA's Level Term II policy offers a variety of rates based upon age, health and lifestyle. The rates we provide in our ads, brochures, and newsletters are usually our best rates, also referred to as our Super Select Rates. Most rates advertised by other insurers are their best rates as well. If companies use different ratings categories it becomes very hard to get an accurate comparison. It is always important to read any footnote or explanation provided. You will generally see words rates that may be higher depending on an individual's health and lifestyle. If a military member sees our best rate in an advertisement or brochure and has a health condition that places them in another category, the rate will be higher. The written quotes provided by our membership coordinators currently show our Select (middle) rate category because that is the premium amount we use to determine the necessary deposit to be provided with the application.

Q: Is it harder to qualify for AAFMAA's BEST RATE compared to others?A: No. What is important is to be consistent, accurate and truthful when you provide answers to lifestyle and health-related questions.

Q: Do all companies use the same ratings and call them by the same name? A: No. Some companies use Super Select, Select or Standard while others use different terms. The point is there is a high rating down to a low rating. Some companies have three rate classes and others could have five or six.

Q: Why should I trust AAFMAA to give me an unbiased opinion?A: Because our membership coordinators are not commission based. They are salaried employees working with your best interest in mind. They do their best to try to help you understand which policy best meets your needs.

Q: What should I do to make sure I am comparing one policy correctly with another? A: Make sure the features and benefits of each policy you are comparing are the same. If you have trouble understanding them, or need help, call an AAFMAA Membership Coordinator toll-free at 1-877-398-2263.

Q: What are some of the things I should look for when comparing policies?A: First make sure you are comparing like policies. For example, compare a renewable term to a renewable term. Don't compare a group policy to an individual policy. Some things are easy to understand such as your age, the amount of coverage, the length of time you will have the policy, your health, and your gender. Harder differences to calculate include your occupation, different categories of risk, renewal options for additional insurance, and restrictions as to the amount of coverage based on lifestyle. Also consider if one is a group policy or individual policy, how much you can borrow and at what rate, and if there are surrender charges.

Q: Is term insurance easier to compare than whole life or permanent insurance? A: Term is generally simpler to understand and therefore usually easier to compare. Whole life has more options to consider and can be more costly to you if not properly compared.

Q: Will AAFMAA always be lower in cost?A: That is our goal. We periodically monitor our competitors' rates to make sure we are the lowest. Sometimes certain policies from other companies may be aggressively priced in particular age groups to attract new business, but overall AAFMAA's rates are lower. AAFMAA can help point out these differences and advise you of your options.

Q: Can AAFMAA increase the premium of my policy during the policy's term?A: No. Once your premium is established, it is set. The only policy with an increasing premium structure is our five-year Renewable Term. The premium is set for five years at a time, based upon your age and is renewable to age 70. This policy is most similar to Veterans Group Life Insurance (VGLI), except that all coverage has to end by age 75.

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