Wednesday, 20 September 2006
Life Insurance To Get Cheaper In 2007
Who wouldn’t mind paying less for their life insurance premiums?
According to the Insurance Information Institute, the average cost of life insurance premiums is going to drop 4% in 2007.
“The four percent drop projected for 2007 is in line with the average five percent per year drop beginning in 2000,” said I.I.I. economist Dr. Stephen Weisbart. “The result is that, in 2006, premiums are less than half of what they were over a decade ago.”
According to Dr. Weisbart, rates have been dropping because the primary market for life insurance — people between the ages of 25 and 44 years — have had a major drop in their death rate. In 1996, the rate was almost 178 deaths for every 100,000 people in that age group. Today, the rate is almost 162 deaths for every 100,000 people.
“That is nearly a 10 percent drop in the death rate in less than a decade for the prime insurance-buying ages,” added Dr. Weisbart.
So how much can you expect to pay?
A 40-year-old man who doesn’t smoke will be able to get a 20-year term life policy worth $500,000 for $615 a year. If he qualifies for the “preferred risk” rate, it will only cost him $340 a year.
The I.I.I. expects rates to go down for permanent life policies, too. But for most insurance consumers, the rates on term life are more important. A recent study from LIMRA International found that 72% of the married couples who bought life insurance in 2003 — and 62% of the single parents — bought term life policies.
Technorati Tags: Life Insurance
