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Why Now Is a Great Time to Buy Life Insurance

Why Now Is a Great Time to Buy Life Insurance

For the last ten years or so, prices on term life insurance rates have fallen steadily. The reasons for this decline are many. For one, people are living longer, which reduces the likelihood that a life insurer will have to pay on a claim before a policy expires. Secondly, the Internet exploded in popularity during this time and compelled insurers to lower their rates to keep up with the competition. Lastly, reinsurance companies, or the organizations that insure insurers, have lowered their rates over the last decade, enabling insurers to pass these savings on to their policyholders.

However, according to many financial experts, this trend of declining premiums will soon do an abrupt about-face. In the next few months to a year, premiums are expected to increase as reinsurance companies’ costs rise. The predicted rate increase is also partially attributed to the rise in death rates among younger policyholders (ages 25-35). For this reason, if you’ve been meaning to purchase coverage, now is the time to do it. You may not get another chance to lock in premiums this low for a long time if you fail to buy soon.

The Younger, the Better

The younger you are when you purchase your policy, the less it will cost. In fact, permanent life insurance policies, also called whole life coverage, allow you to keep the same annual premiums for as long as you live. If you purchase a policy in your twenties or thirties, your rates will be especially low. Even people in their forties can get decent rates if they act quickly. Remember that waiting even another few months to purchase your policy may result in significantly higher premiums, so now is the best time to act.

What to Do

If you’ve decided to buy coverage, you can begin the selection process by soliciting quotes from three or four different carriers. Try to get at least one quote from a smaller insurer, as they sometimes have cheaper rates than major carriers. As you’re shopping around, compare the rates for your age group for term and whole-life coverage. Term will usually be cheaper because it remains in force for a limited period of time and does not build cash value. On the other hand, with life insurance rate increases just around the corner, the stable premiums of whole life may also be a good option.

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