Term Life Insurance Articles
Two Reasons Why Term Life Insurance Rates Have Dropped
2009-08-07
There are two main reasons why term life insurance rates have dropped. One is because most policyholders are expected to live longer, so they will continue to pay premiums for a longer period. Because of this, the insurance companies can afford to lower their rates. Since 2000, premiums for term life insurance have dropped by more than 4% per year, and they are 50% lower than they were just a decade ago. According to Steven Weisbart, an Insurance Information Institute economist, a continued downward trend is foreseen.
Effective January 2009, all insurance companies were required to use the Commissioners 2001 Standard Ordinary Mortality (CSO) table, which calculates rates. For instance, a male age 65 is expected to now live to age 81 instead of age 78. A female age 65 is expected to live to age 85 instead of 81.
Another reason why term life insurance rates have dropped is that there is more competition than ever, including Internet insurance companies, which generally means lower rates.
However, be sure that you choose an established strong company with at least an "A" or better rating from A.M. Best Rating Service that rates companies on their ability to pay claims as well as on their financial stability. This way, you can verify the authenticity and reliability of the company you want to use so that you won't get a rude awakening down the road.
Term life insurance, compared to permanent whole life insurance, is an extremely cost-effective way to provide for a family in the event of the major income-producer's death. There are mortgage payments, utility and credit card bills, college and wedding expenses for the children, and other expenses that need to be provided for. So, before you decide what amount of insurance you need and for what length of time, take all those figures into consideration and add them up. One suggestion is to purchase coverage in the amount of ten times your annual gross income so that your family can continue the lifestyle they are accustomed to.
Not only is there peace of mind knowing that you have life insurance coverage, but there is also the benefit in term life insurance of having extra funds. These are funds that you would have used to pay for whole life insurance, but that can instead be used for other vehicles to provide income in future years.
Another warning is to never cancel your current coverage, if you are thinking of replacing it, until you receive written confirmation of approval and are satisfied with the rates and terms.
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There are two main reasons why term life insurance rates have dropped. One is because most policyholders are expected to live longer, so they will continue to pay premiums for a longer period. Because of this, the insurance companies can afford to lower their rates. Since 2000, premiums for term life insurance have dropped by more than 4% per year, and they are 50% lower than they were just a decade ago. According to Steven Weisbart, an Insurance Information Institute economist, a continued downward trend is foreseen.
Effective January 2009, all insurance companies were required to use the Commissioners 2001 Standard Ordinary Mortality (CSO) table, which calculates rates. For instance, a male age 65 is expected to now live to age 81 instead of age 78. A female age 65 is expected to live to age 85 instead of 81.
Another reason why term life insurance rates have dropped is that there is more competition than ever, including Internet insurance companies, which generally means lower rates.
However, be sure that you choose an established strong company with at least an "A" or better rating from A.M. Best Rating Service that rates companies on their ability to pay claims as well as on their financial stability. This way, you can verify the authenticity and reliability of the company you want to use so that you won't get a rude awakening down the road.
Term life insurance, compared to permanent whole life insurance, is an extremely cost-effective way to provide for a family in the event of the major income-producer's death. There are mortgage payments, utility and credit card bills, college and wedding expenses for the children, and other expenses that need to be provided for. So, before you decide what amount of insurance you need and for what length of time, take all those figures into consideration and add them up. One suggestion is to purchase coverage in the amount of ten times your annual gross income so that your family can continue the lifestyle they are accustomed to.
Not only is there peace of mind knowing that you have life insurance coverage, but there is also the benefit in term life insurance of having extra funds. These are funds that you would have used to pay for whole life insurance, but that can instead be used for other vehicles to provide income in future years.
Another warning is to never cancel your current coverage, if you are thinking of replacing it, until you receive written confirmation of approval and are satisfied with the rates and terms.
