Banding is the structuring of life insurance premium and rate scales into coverage ranges or bands where cost per thousand decreases as face amount increases, reflecting economies of scale and typical case profiles. For example, a carrier may offer one rate band from $100,000 to $249,999 and a more favorable band starting at $250,000 or $500,000. Banding encourages advisors to place slightly larger face amounts to reach better unit pricing, but it also requires careful alignment with true insurance needs and financial justification. Band thresholds vary by carrier, product, and sometimes underwriting class.

Advisors use banding knowledge when designing face amounts and layering policies. They may suggest modest increases in coverage to move a case into a more favorable band where overall premiums are similar or even lower. Illustration systems often highlight band transitions, and BGAs may provide banding charts for popular products. Underwriting and compliance teams ensure that increases for banding purposes still meet financial'needs tests and replacement rules. Understanding banding helps advisors structure coverage efficiently, avoid under'banding that costs clients money, and communicate why slightly higher face amounts can sometimes be more cost'effective.