What's it going to take to get you into this life insurance policy?
With term life prices again at all-time lows for
2008, that's what insurance agents across the country are probably
wondering. If you've missed out on the bargain term life prices of
recent years, you are not out of luck yet. All signs point to continued
term life affordability.
Term life prices are expected to drop by 1 percent in 2008. |
Term life prices
are expected to drop by 1 percent in 2008 and there will be little
change in permanent life insurance prices (whole life, universal life
and variable universal life), according to the Insurance Information
Institute (III).
Rate dips are slowing down, though. The III reports
that term life rates dropped an average of 4 percent a year since 2000
and an average of 15 percent annually between 1994 and 1999. Premium
declines are slowing because the factors that drove them down more
sharply in the past have stabilized. Specifically, Internet quotes for
life insurance punched prices down in the past as growing numbers of
consumers found they could easily comparison shop for term life online.
Also, reinsurance, which is purchased by insurers, has seen rate
stabilization, too.
In addition, "life insurance rates are dropping
because death rates for the 25 to 44 age group — the primary age range
for purchasing life insurance — have decreased significantly," says
Steven Weisbart, vice president and chief economist for III.
All in all, it means that term life premiums are now less than half of what they were in the mid-1990s.
Yet Americans aren't taking advantage of the low
rates in the numbers they should: Twenty-eight percent of wives and 15
percent of husbands have no life insurance at all, according to LIMRA
International. Among those who are insured, husbands carry enough life
insurance to replace their income for 4.2 years, and wives for 4.9
years. The typical married couple would need to double its current
coverage to meet the expert recommendation of having enough life
insurance to replace income for 7 to 10 years, according to LIMRA.
Fifty-six percent of married parents believe their current life insurance coverage is inadequate, says LIMRA.
"I'm always puzzled by people who claim that life
insurance is a hassle — that it is either too expensive or a burden to
obtain," says Jack Dolan, Vice President of Media Relations for the
American Council of Life Insurers. "The fact is that it can be obtained
for most people fairly inexpensively. Term insurance certainly provides
a great bang for the buck, especially for younger people. And prices
are dropping. People living longer than ever before. Insurers can
provide more coverage to more people than they have in their 200-year
history in America."
"What's more," says Dolan, "the medical exam
associated with getting a policy is very simple. In many cases, medical
professionals visit applicants at home and run through a battery of
tests that in years past were conducted in doctors' offices. It can all
take less than one hour."
If you have resolved to pull yourself out of the
ranks of the underinsured, start by figuring out how much coverage you
need with Insure.com's Life Insurance Needs Estimator Tool.
"Securing coverage can truly instill pride in the
insured. It leaves him or her knowing that their loved ones will be
okay financially if they die unexpectedly," says Dolan.
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