Are Your Life Insurance Premiums Skyrocketing?

Insurance professionals have been telling us for years that permanent life insurance— such as Whole life, Universal Life, Variable Universal Life and Index Life– was the right investment vehicle for the future.

A majority of these cash-value insurance policies were based on assumed interest rates– 7-9% in past years. In fact, they were quite similar to Adjustable Rate Mortgages (ARM-s). Neither the ARM-s interest rates or the insurance company crediting rates were guaranteed. But people were pretty happy because the insurance policies could grow enough principal so that the interest returns could offset or cover the entire premium. Pay more now so you could pay much less in the future or nothing at all.

The problem is policyholders assumed this coverage would last forever, or at least until they died. That’s what made the purchase worthwhile versus buying cheaper term life insurance. It seemed like smart financial planning at the time but times have changed dramatically.

Many policyholders are now being notified by their insurance carriers that their premiums are going to go way up because the insurance company’s projected high interest rates did not happen and in fact, went way down.  So, these policyholders no longer had the big interest payments to reduce their premium or keep their policies paid up.  The very reason they bought those insurance policies in the first place.

Timing couldn’t be worse. Here you sit with skyrocketing ARM-s you can’t afford and now your insurance premiums are going through the roof. At one of the worst economic time in decades when people are underwater and need insurance more than ever… many have lost or will lose their insurance coverage. It’s the perfect storm.

The good news is that there are solutions for those policyholders in reasonably good health. Many insurance companies that offer Guaranteed Term Insurance policies can be bought for a fraction of what they spent on permanent life insurance coverage.

You can guarantee your premium for 10, 20, even 30 years. And the premium is fixed with these types of policies.. it cannot go up during that term length.  The coverage stops at the end of the term, but many of these policies have options guaranteeing your right to convert to permanent cash-value types of insurance later when you can afford it.

It can be a security blanket through these tough times.  Maybe not your final solution but it may the only solution you can afford right now if you want to give your family significant amounts of life insurance protection.

Make sure you check with a licensed life insurance agent before you do anything and remember, don’t discontinue any existing life insurance coverage you currently own before you are covered by a new insurance policy.

LifeQuote Holdings, Inc., is a pioneer in online life insurance brokerage. The firm was one of the first to offer consumers free life insurance quotes via telephone in the 1980’s, prior to developing the Internet business model. The executive team is made up of life insurance and retirement plan veterans, as well as media/marketing specialists, and experts in web design, development and search engine optimization. The company CEO is a respected leader in his field and coveted public speaker at national industry meetings. To find out more, please visit www.lifequote.com.

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