You know, I really hate to point fingers and tell on folks, but when they are just blatantly charging more than they need to, someone needs to speak up.

While we all love to pay for insurance (right up there with vacation), hardly anyone I’ve talked to would pass up an opportunity to pay less for their life insurance as long as it comes from a reputable company and offers good guarantees. OK, so let’s leave Swamp Life of Vermont and AARP out of this discussion.

What I would like to talk about is America’s biggest property/casualty (industry name for auto and homeowners insurance) companies. For the sake of this discussion we’ll stick with the three of the most wholesomely named, State Farm, Farm Bureau and Farmer’s. I mean what is more down home and honest sounding than farms?

These guys have had it rough over the years with hurricanes, tornadoes and wildfires. But, they still have managed to be profitable. So, I suspect that over the years they haven’t underpriced their insurance. They all sell themselves as one stop, full family need, give us all of your insurance business kind of places. They’re really big at offering discounts. You know. “If you get your life insurance through us we can give you 10% off on your auto insurance”. It sounds like, well, an unbeatable kind of deal.

I kind of enjoyed math when I was in school and once I was able to start applying that math with some common sense (that came much later) to situations, some interesting trends starting becoming clear. For instance, in the situation above, if Farm Bureau can offer you 10% off on your car insurance if you buy life insurance, doesn’t it kind of make sense that either their car insurance or their life insurance is overpriced. Or maybe both.

I’m not saying this will work every time, but I will conservatively say that 90% of the time, if you buy your life insurance from a life insurance company (not property/casualty), the savings on your life insurance will be larger than the 10% discount you might receive from say State Farm. And I am willing to bump my estimate up to 100% if you recently had a speeding ticket or fender bender.

Bottom line. I just beat up a little on three great companies. They are great at their primary business which is property and auto insurance. But they aren’t even in the ballgame when it comes to life insurance pricing, knowledge or products. Shop it for yourself and do the math. I just cut a life insurance bill for the CEO of a company from $12,000 a year down to $6,000 by moving his business to a life insurance company.