Young continued, "Because some life premiums are still at or near historic lows, buyers can now lock-in great rates for their choice of ten to thirty years. And for those whose needs call for it, we also offer many permanent policies that feature level death benefits and premiums for life. Knowing that so many households either don't have any life insurance at all or don't have enough coverage, it's puzzling as to why any household breadwinner or stay-at-home parent would not buy the coverage they need at this time while premiums are so low."
Applicant Chris Kirk of Marysville, Michigan agrees, "The reason I chose term life was because it offered much more of what I was looking for, and it really came down to the dollars and cents. I was getting more security, and my agent walked me through the pros and cons of term and whole life. Coming from a history of whole life insurance, I feel much more in control with term coverage."
Thandra Reddy, of Fort Worth, Texas, decided to buy some term life now to replace the group policy he had lost when he retired. "I retired in May and had life insurance through work, but that went away with retirement. I had to get coverage, and decided to go with term. It made the most sense for me," said Reddy.
Economic uncertainty, including tax code confusion, has made the need for basic life insurance more important than ever because personal life insurance proceeds are generally not taxed as income to the beneficiary.
"With the economic anxiety that people are feeling, it's clear that consumers are more concerned with making ends meet than concentrating on purchasing life insurance," said Michelle Matlock, editor of Life Quotes, Inc. "If the primary breadwinner dies this would leave their family financially devastated. Life insurance provides a safer option than taking your chances and going without."
When it comes to life insurance, many U.S. adults are uninsured or underinsured. According to the Life Insurance Market Research Association (LIMRA), a whopping 30 percent of U.S. households (35 million) do not have any life insurance and only 44 percent of U.S. households own an individual life insurance policy. Individual life insurance sales are currently at a 50-year low.
Households that have children under the age of 18 (11 million), say they would immediately have trouble meeting daily living expenses if a breadwinner died, according to LIMRA's research.
"If one in four U.S. households depend solely on the protection of group life insurance, what would happen if the primary breadwinner suddenly became unemployed or had their benefits or hours cut? In most such cases, the employer owns the policy and thus has the final say," said Matlock. "We advise every employee who has a corporate-owned life insurance in place to ask their HR department exactly what will happen to the coverage or premium should the employee leave the company."
Many believe that the life insurance coverage they have through their employer is sufficient to meet their needs. This past year alone, someone became unemployed in 15 percent of all U.S. households, according to LIMRA.
Some of the most popular life insurance policies available today for buyers of term life are, in fact, not term life insurance at all, but are instead term-like universal life insurance, explained Young.
"While these new universal life plans are priced to offer pure death protection at a known cost for a specified period of time, they generally cannot be exchanged, or converted, for another policy," said Young. "Because by definition they are permanent life insurance policies, they can be renewed beyond the level premium period at higher rates without another medical exam for as long as the coverage is needed."
A convertible term life insurance policy presents almost the same option, with most renewable beyond the term period for longer than the average life expectancy. But they also present the opportunity to exchange the policy for a permanent policy without having to go through underwriting.
Life Quotes advises that it is important to obtain the advice of a competent, licensed insurance agent and have a full understanding of what the conversion and/or renewability privileges are for the policy you are considering.
According to the Life and Health Insurance Foundation for Education (www.lifehappens.org), the cost of basic term life insurance has fallen by about 50 percent over the past decade.
"Last year, several top carriers made almost across-the-board price increases, undoubtedly expecting the marketplace to follow their lead. When that failed to materialize, in the months that followed, most of those same carriers abandoned that strategy, and adjusted their prices once again to re-establish their market competitiveness," said Young. "We have also seen a few companies either introduce new products or make significant changes to existing ones. Between the lower prices, expanded choices, and competitive underwriting, now is as good a time as any to get protection for what matters most."
When purchasing life insurance, it's important to pay attention to an insurer's financial stability ratings. Life Quotes Inc. gives you instant quotes from leading life insurance companies with the latest financial stability ratings from A.M. Best, Fitch, Moody's, Standard & Poor's and Weiss Ratings. Life insurance shoppers can visit www.lifequotes.com for free quotes and advice based on their criteria or call 1-800-556-9393.
Market survey methodology
Life Quotes, Inc. polled 30 leading U.S. life insurance companies to find the best rates available on the popular $250,000, $500,000 and $1 million term life insurance policies. All companies examined have top-notch ratings, meaning they are rated either "Excellent" or "Superior" by A.M. Best Company, an independent rating organization. The sample applicants do not use tobacco and range from 30 to 55 years of age. The tables above contain the lowest possible rates found for 10-, 20- and 30-year level term life policies for a sample California resident.
For example, in the case of a 40-year-old male in good health, a $500,000, 20-year level term policy would cost only $355 per year with Savings Bank Life Insurance Company of Massachusetts, $360 with Genworth Life and Annuity Insurance Company, and $394 with American General Life Insurance Company.
Notes to tables
Final premiums and coverage availability will vary depending upon age, sex, state availability, hazardous activities, personal and family health history. The sample, California non-tobacco use premiums shown above, may include: American General Life Insurance Company, Houston, TX, form 07007; Genworth Life and Annuity Insurance Company, Lynchburg, VA, form GA1002-0709; Reliastar Life Insurance Company, Minneapolis, MN, form 1315-2/10; Savings Bank Life Insurance Company of Massachusetts, Woburn, MA, forms B36 and B46 series; Transamerica Life Insurance Company, Cedar Rapids, IA, form 1-334 06-107. Actual policy forms may vary by state. California and Utah dba Life Quotes Insurance Services, Inc.: CA #0827712, #OA13858; UT #90093. Some premiums shown may be for universal life insurance policies with term-like premium and death benefit guarantees. Term life premium rates always escalate after initial rate guarantee period. All sample rates shown are effective September 1, 2010, and subject to change, state availability or withdrawal without notice.
About Life Quotes, Inc.
SOURCE: Life Quotes, Inc.
CONTACT: Michelle Matlock
Copyright ©1984-2018 Life Quotes, Inc., 8205 South Cass Avenue, Suite 102, Darien, Illinois. Life Quotes, Inc. and certain of its personnel are licensed as insurance agents, brokers or producers in all states. CA agent #0A13858, LA agent #200696, MA agent #1746830. CA under agency #0827712 dba Quotes for Life Insurance Agency, LA agency #205078 dba Life Quotes Inc, UT agency #90093. All rights reserved. Telephone (630) 515-0170. Founded 1984.