Affordable life insurance is plentiful

What's it going to take to get you into this life insurance policy?

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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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