When we stopped by our insurance agent’s office to add our oldest son to our car insurance policy last month, we got a pleasant surprise.
We were aware that he’d qualify for discounts for his good grades, for having taken a defensive driving course, and for having completed State Farm’s “Steer Clear” safe driver program.
What we didn’t expect was to be presented with an extra discount if we added a life insurance policy on our son’s behalf. Interestingly, this discount actually outweighed the cost of the life insurance policy, so it was a classic win-win.
All told, the good grades, defensive driving, and Steer Clear discounts combined to reduce the premiums associated with his coverage by nearly 52%. But then our agent pulled out the life insurance wildcard.
By adding a small life insurance policy (a $25k Universal Life policy) we’d save an additional 38% — including the nominal cost of the life insurance policy. Now, before we go any further…
Yes, I do realize that there’s no need for him to carry a life insurance policy. And no, I’m not a fan of universal or whole life insurance policies. I’m a “buy term and invest the difference” kind of guy. But it’s had to argue with the numbers.
By picking up this policy, we realized a net savings of 38% on his car insurance. When I asked how/why it worked this way, I was told that it moved him into a “different category” of insurability — or some other nonsense. Whatever.
I’d imagine this this is some sort of loss leader with a goal of getting people on the universal life gravy train in hopes of keeping them hooked going forward. But for now, it’s a great deal. And we can always cancel if we have a change of heart.