I have spent the last few weeks highly encouraging fence sitting customers to make a move if they truly want the deal of the century on term life insurance. While Prudential’s 4-5% increase in term insurance rates will still keep them competitive, when you consider paying that higher premium for 20 or 30 years, well, it would kind of suck to look back at the opportunity lost.
Prudential is just the most recent in a string of companies that have changed their no lapse guarantee universal life and term insurance rates. I screamed as loud as I could and as often as I could when I saw it coming back at the first of the year. Many have acted and locked in historically low rates. Others are apparently not seeing the logic of saving money during a recession.
What’s been happening since the first of the year isn’t just one of those ho-hum, another rate increase, kind of thing. While the price of everything has been going up for the past 15 years, the cost of life insurance has been going quite steadily down. These aren’t just “another rate increase”, but rather the first rate increase in more than a decade amongst the term insurance leaders who have been battling lower and lower.
What’s behind the turnaround? For many companies it is just a conservative move to make sure reserves remain strong, especially in their longer term products and external guarantee universal life products. For others, companies hit by rating changes, it is actually a mandated increase in reserves due to their downgrade in financial ratings.
Whatever the reason and whatever your position, if you are considering adding term insurance or permanent insurance to your portfolio, or would like to replace high priced whole life or volatile variable universal life with a better permanent product, now is the time to buy at prices that will never be seen again and the best guarantees in the industry.
Bottom line. We’re still looking at the tip of the iceberg with Prudential’s term rate increase. I’m thinking you want to have the job done before we see what’s still coming.