Entry fees to life insurance: what are they and how to negotiate them?

Entry fees to life insurance: what are they and how to negotiate them?


When purchasing life insurance, you have to pay certain fees that will be in addition to your monthly premiums. Among them, the entry fees to life insurance which are negotiable, fortunately, provided you know how to use your situation to your advantage. Explanations.

Entry fees to life insurance: what is it?

These are fees taken from each payment and are intended for the remuneration of the intermediary or the contributor of the life insurance contract. Also called installment fees, these are usually set by the insurance company, but are negotiable as long as the provider in question (the one selling you the contract) agrees to reduce their margins to get you to sign.

The rate applied (between 0% and 5%) depends mainly on the product purchased and can be decreasing when the amount of the payment reaches a certain sum (15,000 dollars or more). In the long run, the entrance fee alone can add up to over a year of payment, so knowing how to negotiate it is important. Aside from the sum to be paid, other points can be put forward to convince the intermediary to make more effort.

Tips for negotiating entrance fees

Play on your customer loyalty

If you are not new to your insurer / bank, do not hesitate to underline your seniority to request a reduction. Bring your previous contracts to show your determination to get a lower rate. As the contributor is subject to a quota of contracts sold over the year (to earn more profit on other costs), he should not risk losing a loyal customer.

Emphasize the strengths of your profile

Insurability plays a major role in setting premiums, the amount and the duration of the contract. If you are young and in good health, you can base your claim on the fact that your life insurance contract will last for a longer period and therefore be more attractive to your insurer. If in addition you do physical exercises to keep in shape, you have every interest in exploiting this asset!

The possibility of buying multiple contracts

Your family situation can be an advantage. If you have a family and are considering getting your children or spouse insured, you will have a better chance of getting a goodwill.

You can also mention your interest in making other investments if you own a business or a home. The intermediary will therefore have to satisfy you on this first contract in order for you to sign others.

If none of these situations apply to you, take the time to compare the offers in the market.

How can you find cheaper entrance fees?

Using comparisons of entry fees to life insurance

Because it is important to compete to find the best deal, it is also possible to compare offers based on specific factors such as entry fees. Quebec has several online comparators that you can consult to find your future insurer.

By purchasing life insurance online

The advantage of buying life insurance online is that the margins deducted and the costs of management are lower. Most online offers do not charge any entry fees. However, be careful with the performance of these contracts and the hidden costs. Explore all the possibilities first before making a decision.

Watching for promotions

Traditional insurers often take commercial actions to attract more traffic. They most often relate to entry fees (up to 0%) so it is better to wait a bit (while actively seeking) to save more than a year of payment.