BeamaLife Blog

A few months ago, the word was spreading throughout the industry.  There were magazine articles, and nightly news reports sending out the story that term life insurance rates were on the rise, after more than 10 years of declines. 

But honestly, there’s very little historical information about the cost of life insurance.  It’s not like the stock market, that’s tracked every moment of every trading day.  And different life insurance companies charge differing amounts for the exact same coverage on the exact same person.  So in a sense, it’s hard to say what’s truly going on, except in the most general of terms.

One article I read talked about how in the mid 1990s, the cost of a $500,000 term policy for a healthy 40 year-old man was close to $1,000 a year.  By 1999, the article continued, the cost had dropped to about $425 per year for the same coverage.  And by 2009, the cost had dropped further, to about $360.  The alarming thing, according to the article, was that at the start of 2010 the cost had risen to $400.  

Much of the decline in price can be attributed to the fact that people are living longer these days.  The more time that exists between when you start paying for your life insurance policy and when the life insurance company has to pay your claim, the less expensive the life insurance can be.

And much of the increase can be attributed to what’s happening in the financial markets these days.  Insurance companies are facing the same tight credit market that the rest of us are.  Understandably, insurance companies have to be more concerned about their own financial futures than they needed to be just a few years ago.

So if the costs of life insurance really are on the rise, should you rush to purchase a new life insurance policy?  Ask a local agent, and the answer is very often going to be “yes.”  Ask us, and the answer is going to be “it depends.” 

Ask yourself these two simple questions,  First, is there someone or something that you care about that would suffer if you were to die?  Think about your family, your business, your favorite charity or religious organization.  And second, do you have enough money right now that you could set it aside for them? 

If you answered “yes” to the first question, and “no” to the second, then I’d say it’s time for you to buy life insurance, regardless of what’s happening with the overall costs of coverage.  Buy the policy that best fits your needs now.  If prices go down later, you can “refinance” your policy and lock in the new, lower premiums.     

And if you already have insurance, but haven’t checked prices in recent years, take a look at a new policy.  You may find that there’s money to be saved.  It all starts with a quick phone call to BeamaLife!