Since term life insurance is basically a commodity the life insurance carriers have had to make it very affordable to compete.   The ability to keep it cheap is centered around a few factors.   One is that the insurance companies rarely ever pay a death claim on a term policy.   Typically, less than two percent of people with term policies ever make a claim.    Since so few people actually die, it is a big money maker for the life insurance company.    It is a win for the consumer because they were able to get a good amount of coverage for a very reasonable price.

The other big factor in keeping the premiums down is that fact that life expectancy has increased.   People are living longer and that contributes to being able to offer reasonable rates to an aging population.   Over the last few years rates have come down to the lowest they have ever been.  In the last couple years, we have seen some companies have modest price increases due to their overall portfolio taking a hit financially.  To make up for their losses elsewhere they had to charge a little bit more for life coverage.

Another main reason, that rates are so cheap is the amount of competition.   With so many carriers offering life insurance at competitive rates, it is imperative to be in that ballpark to be successful selling term.  Some carriers are not trying to compete with their term products as their focus might be on high quality permanent plans.