2009 Insurance Rate Wars, Time to Shop is Now!
by Efin Advisor | April 19, 2009
A new batch of numbers, released at the top of the year and stating that people are living longer than ever before, has prompted Life Insurance companies to lower their rates in many cases. If you have a life insurance policy purchased prior to 1/1/2009 you may be paying too much. Some of the largest savings are being seen in Term Life Insurance policies between $500,000 and $1 million.
Compared to 20 years ago, term insurance rates remain extremely low. Increased competition between carriers on the Web, improved mortality rates and better underwriting has driven the cost down by 75% since 1990. For instance, a 20-year term policy providing $500,000 in coverage would have cost a 40-year-old, non-smoking male in 1990 about $1,400 a year. Now, the same policy may cost around $400.
Term insurance is particularly attractive now, when the tough economy is forcing consumers to look for ways to cut costs. These policies are renowned as being smart for younger individuals or families who need insurance for a certain time period, say while they have dependent children.
The industry may be facing a reversal of term insurance rates with increases to come. Before companies raise rates, consumers can take advantage of the market opportunity…if they act quickly. When was the last time you compared the cost of your life insurance policy or shopped for a better price?
I’ve heard rates may be going up. Not surprising given that everyone is taking a bath these days. Good advice to get a check-up before then! Cheers! Good site!!
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That’s insane. I was reading those numbers, expecting it to be about the same and then wonder how inflation was calculated into that, but even if you assume inflation, having a 1000 dollar drop is unheard of. I may have to go get a new policy when I’m done typing this
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That is crazy. When i was reading those numbers, i was expecting to have to figure out the “real” value including inflation, but as soon as i read 400 dollars, that wasn’t necessary. I’ve heard of things becoming cheaper, but insurance dropping by 1000 dollars without even considering inflation is nuts. I’ll have to go get a new policy now
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Wish I had insurance to protect against a recession! Still, every dollar counts. Surprised to see how far premiums have fallen in the last 20 years. Is it now “What comes down, must go up?”
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I think these prices are going to go up very soon (so spend now). If people start buying lots of insurance, which i expect they will, the demand will cause the companies to raise their prices. Also, because of inflation, companies will start asking for more money as the economy worsens. Conversely, if people stop buying insurance, even if its cheap, instead of making it drop due to less demand, an odd side effect may be that insurance companies increase the premiums of people who already have insurance, since many people probably won’t cancel their policies
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Term life insurance makes more sense for our family at the present moment. Thanks for the updates!
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