Of all the goods and services that can be purchased on the Internet, few have plunged as much in price as life insurance, a product that is hundreds of years old. The size of the drop has been startling. The same 20-year, $500,000 term-life policy that cost a healthy 40-year-old male $995 a year in 1995 now costs just $455 on average--a decline of 54%, even though consumer prices rose nearly 15% over that period.
While Americans are living longer and competition has grown increasingly fierce in the $100 billion life-insurance industry, that's only part of the story. A good chunk...