Since the financial meltdown of 08 began I have been gently screaming my head off for those millions of folks whose life insurance is tied up in whole life and traditional universal life to have it reviewed. Get a reality check!!!

There are only a handful of factors that impact whether a non guaranteed life insurance premium stays the same or increases. Technically I suppose it could decrease but since I haven’t seen that happen, ever, I suspect right now is not the time to begin watching for that occurrence.

Just for review sake, those factors that can change the rate are interest rates, company experience in investments and ratings, and mortality experience. The interest rates we are talking about is the interest that companies are earning on the cash value it takes to keep one of the aforementioned policies afloat. Since no one is making money on their investments currently, it’s safe to assume that their assumed interest rate may not be making ends meet. That’s one hit.

On the company experience point, well let’s just say there aren’t a lot of enjoyable company experiences going on right now. Many company ratings have been downgraded because of their exposure in the real estate market. If ratings go down, companies are required to carry higher reserves. On policies with non guaranteed platforms the additional funding will come from you, the policy holder. Coming soon to a mailbox near you is a rate increase that your agent said would never happen 10 years ago.

The only good news out of the three is that mortality experience continues to improve, but by no means is it going to offset the downsides.

There is one other piece of good news, but you need to act quickly. Term insurance and universal life with a no lapse external guarantee are still great values and because they are completely guaranteed (no assumptions), once locked in it is good for as long as you need it. But just a word of caution. If you hang out to see if my predictions come true and then try to bale and go the other way you may be too late. By then the cash value that once held your current policy together will be gone and, because of the reasons stated above, you will either find that the products mentioned above have disappeared or gone up in price, making switching much less attractive.

Bottom line. If you have permanent insurance or want it in your portfolio, this is no time to see how things ride out. It’s not like a stock that may eventually come back. Once it goes it may as well have been pushed off a cliff. Don’t let it happen to you. Get an independent agent to review your life insurance today.