Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Yes. Each state has it's own department of insurance and sets it's own requirements or compliances for all policies sold inside their particular state. Some states may look almost identical to other states requirement wise. Others like New York for example have very NY state specific rules that often require insurance companies setting up companies inside NY state. You might find ABC Insurance Carrier doing business in 49 states an ABC Insurance of New York doing business there.
The state that I work in also is considered a pretty restrictive state for insurance companies. Restrictive isn't necessarily a bad thing. The idea is done with consumer protection in mind. For my state, it means new plan approval is much slower than other states, but the flip side of that is if a problem with a plan occurs, it usually hasn't hit the "streets" in my state yet, so the consumers avoided a problem that way.
When states try to be unusually restrictive they often penalize the insurance consumers in that state.
For example, a few states don't allow different rates based on gender. When that happens, most life insurance companies simply charge females the male rates. It penalizes the females around 20% compared to what they pay in other states.
New York's restrictive requirement on insurance companies raises a lot of money for the state but greatly limits the consumer choices to just a few. Many products are not available to them that they could buy if they moved to any other state.
Kentucky's law about no new contestable period on replacement policies does protect consumers but it also causes some companies to choose not to offer products in that state.
Prices for life insurance do not usually vary by state within the same company, but they can. Life insurance is regulated by states, so states can and do vary in what products, and features of products, that they approve. That is why you may be able to get one product, rider or price in one state, but not be able to get it in another.
Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
With the exception of a few states, most noticeable New York, life insurance rates vary little from state to state. Each carrier is required to file in every state that offer their product lines. Life insurance is priced predominately on actuarial science, but certain state require great reserves which, in turn, increase the cost of life insurance to consumers.
There is not a huge difference in life insurance premium variance from state to state or even zip code to zip code. Life insurance premiums will vary more on health status and lifestyle factors much more than the state in which one resides. One's health history and whether one eats right and exercises regularly will effect life insurance numerous times over.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Yes, life insurance rates vary by state; however, the difference is not significant. The premium for existing life insurance remains the same if you move to another state. It probably isn’t worth the cost of gas to cross a state line to purchase life insurance. If the life insurance policy results in a death claim the amount paid to the beneficiary will normally exceed the premiums paid!
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The state that I work in also is considered a pretty restrictive state for insurance companies. Restrictive isn't necessarily a bad thing. The idea is done with consumer protection in mind. For my state, it means new plan approval is much slower than other states, but the flip side of that is if a problem with a plan occurs, it usually hasn't hit the "streets" in my state yet, so the consumers avoided a problem that way.
For example, a few states don't allow different rates based on gender. When that happens, most life insurance companies simply charge females the male rates. It penalizes the females around 20% compared to what they pay in other states.
New York's restrictive requirement on insurance companies raises a lot of money for the state but greatly limits the consumer choices to just a few. Many products are not available to them that they could buy if they moved to any other state.
Kentucky's law about no new contestable period on replacement policies does protect consumers but it also causes some companies to choose not to offer products in that state.
State insurance laws can be a double edged sword.