How Can Life Insurance Be So Cheap? 
Life insurance is `` cheap '' because of people called actuaries . These skilled people are very good at calculating mortality of policy holders . Term is an easier calculation because of the specific time period . Statistically speaking only about 1 % of term life insurance policies pay a death claim , because they are either cancelled early or out of term before death . Permanent policies have a much higher claim rate because of the many advantages and people tend to keep them for the whole life . These policies are much higher priced than term because of this risk . 