Life Insurance -
Life insurance premiums plummeting more than ever
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New research is showing that now is the best time to buy life insurance after the rate of premiums has dropped even further this year which means that the average cost of life cover has fallen by 50% over the past decade.
The new drop in premiums is a reflection on the eminence of the two main factors causing these falls. Firstly, the life insurance market in particular has become very competitive and secondly people are generally having a higher life expectancy, which means they pose a lesser risk to insurance companies and help to drive premiums down.
Life insurance rates are dropping because death rates for the 25 to 44 age group—the primary purchasers of life insurance—have decreased drastically over the past 10 years, according to Weisbart. In 1996, the death rate per 100,000 for the 25-to-44 year-old age group was 177.8.
However this should not change the suitability for a person with their own specific circumstances. Just because the statistics are saying you are likely to live longer does not make it so. Nobody wants to talk about life insurance. But if you have young children or others who depend on you, you should have it.
Research every year shows that far too many people have no life insurance, and even more do not have enough to provide financial security for their loved ones. Given the low premiums, if you are reasonably healthy you can buy a lot of life insurance without spending a lot of money. On the other side of the coin, if you have health problems, do not assume you are uninsurable. Advances in the treatment of cancer and other diseases have led insurers to lower premiums for people once classed as high-risk.
Furthermore, existing policyholders should take advantage of low premiums by constantly updating their policies and informing companies of changes in health for the better. For example, research from Sainsbury’s showed that in the last five years, 6.78 million people have stopped smoking - but just 26 per cent have informed their life insurance company. Those people have ultimately wasted millions a year on life insurance policies that are more expensive than they should be.
Given that after death, an estate can be taxed large amounts by way of Inheritance Tax and that costly funerals can put strain on a spouses finances-there is no better time than to make the step to signing up to a new life insurance policy, and with premiums as low as they are, there is no excuse not to.
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