With summer well upon most parts of the country, it might be a good time to review those insurance policies that have gone mostly ignored for most of the year. Although these policies hardly make the list for top beach reading, a review of how you have planned for a disaster might just give some added peace of mind.
Life Insurance
Reports of living longer and healthier lives have had a positive impact on the business of life insurance. That impact has been quite positive.
Insurers use an actuarial table to determine the life span of their customers. Because we have access to better health coverage, are taking better care of ourselves as a nation and living longer, you may find that your term policy issued as little as ten years ago may be obsolete.
These reductions in costs have been startling. Some term policies covering a healthy 40-year old man for $500,000 just fifteen years ago have seem premium reductions on similar policies of almost 70%. These significant reductions in costs have been a direct results of increased longevity and better health habits.
Should you consider canceling your old policy and getting a new one? Absolutely.
The internet has made shopping for term insurance much easier and has made the competition for your business much harder for the insurer. That has helped with the lower rates.
Companies are able to a much more detailed job at assessing your insurability. Improved technologies make predictions about the future much more accurate when it comes to assessing who will be insured.
If you have recently purchased a policy, you might be eligible for some additional reductions if you have changed jobs, quit smoking or begun to loss weight. All of these will be accounted for and may make you eligible for a reduced premium or increased coverage (or both) without rewriting your policy.
Term life insurance, for those who do not have it, is about as cheap as it has ever been. Term is issued in 10, 20, and 30-year increments. The policy¹s face value, which can range from $100,000 into the millions is paid only if you die during the ³term² of the coverage.
You can over-insure yourself although, but newer policies will allow you greater coverage for the same price as lesser policies afforded just a few years ago. Look at whom the policy will benefit. If you have children, covering the cost of their college might seem important. Having enough to support your spouse and cover basic expenses until she retires can be covered as well. With a $500,000 policy running about $400 for a healthy 40-year old man, adequate coverage for your loved ones is well within reach for most Americans.
You may want to consider a permanent policy. This allows you to continue with your policy after the term expires at the same premium and the same coverage. Be aware that inflation will whittle away at the coverage, but if you obtained it cheaply enough, it might be worth some erosion.
