In these tough economic times ways to save money are always appreciated as long as there aren’t any hidden surprises. Probably one of the most overlooked potential savings is in life insurance that you have had for five to ten years.
If your health has remained the same since you last took out life insurance there is a good chance that substantial savings are available. Why? First, there is a better chance that you bought from a company that wasn’t competitive than one that was. You see those ads all the time that say save 60% to 80% on your life insurance. The truth is there are plenty of companies out there who jabbed you so severely last time around that your savings could beat those percentages.
Of the nearly 2000 companies in the country that sell life insurance there are probably only 30 to 40 that are truly competitive, so the chances that you bought a non competitive rate are pretty good.
Second, term insurance rates have come down steadily over the past ten years and a new era of permanent products popped up during that period in the form of universal life with a no lapse guarantee. With the new permanent option the cost of permanent products like has dropped dramatically and has better guarantees than the old traditional universal life or whole life.
Just one caveat on the rate decrease issue. If you bought a really competitive rate the last time around then there is an age tipping point where the rate at which rates are dropping is overcome by the rate at which us old guys are getting older. Somewhere between 50 and 55 the picture ceases to getting any prettier. But that’s only if you nailed down a truly competitive rate before, so it is worth having your policy and rates reviewed.
When reviewing your policy, consider staggering the term lengths with more than one policy, say for instance a $250,000 10 year term coupled with a $250,000 20 year term. The truth is that in most cases a person is hard pressed to fit all of their life insurance needs into one term length which means that at some point you are paying for insurance you don’t need if you have everything wrapped up in one package. Worth considering!
Bottom line. There is a ton of money to be saved out there in life insurance premiums and very often you can save money and garner better coverage and guarantees in the process.