Costs are declining for life insurance
By Sandra Block
USA Today
Millions of Americans have no life insurance, and millions more don't have enough to provide financial security for their loved ones. That's a shame, because if you're reasonably healthy, you can buy a lot of life insurance without spending a lot of money.
Average premiums for individual life insurance have been falling about 5 percent a year since 2000, and they're expected to drop an additional 4 percent in 2007, according to the Insurance Information Institute. In 2007, a 40-year-old male non-smoker who buys a $500,000, 20-year term insurance policy will pay an annual premium of $615 if he qualifies for the "standard" rate, the institute estimates. If he qualifies for the "preferred" rate, which has more stringent health requirements, he'll pay $340, the institute says.
"The rates are as low as I've ever seen," says Byron Udell, CEO of AccuQuote, an online insurance broker.
Life insurers have reduced their premiums because people are living longer, lowering the risk that the insurers will have to pay benefits to survivors, says Steven Weisbart, an economist for the institute. Insurers have also developed more sophisticated ways to measure the risks of certain lifestyles and diseases, says Michael Kalen, executive vice president for The Hartford's individual life division.
Some tips for buying life insurance:
Premiums for permanent life insurance are considerably higher than premiums for term insurance. If your goal is to provide financial security for your children until they're old enough to support themselves, a term policy is probably all you need.
