A great thing happened to the life insurance buying public in the year 2002, the industry switched over to new “Mortality tables” (also referred to as Life Expectancy Tables). This means that the cost of life insurance in the last 5 years has substantially been reduced.

An insurance premium is made up of three basic components:

1. Life Expectancy (How many years you’re going to live)

2. Insurance company expenses (Costs of doing business)

3. Insurance company yield on investments

So, when your life expectancy increases, the company can expect to keep getting your annual premium for many more years giving them more money to invest for a longer period of time with the projection that there will be less deaths (money to pay out in death claims) leaving more money available to invest.

This one factor alone has substantially reduced the annual cost of life insurance premiums.

Another factor in the cost of insurance is your health. With the new advances in medicine, people are living longer due to earlier detection of problems and state-of-the-art drugs keeping these problems under control. These advances are making it possible for insurance companies to have more lenient underwriting, further reducing the annual premium cost of your life insurance.

Don’t assume you’re uninsurable if you have health problems. Hartford Life Insurance Company has lowered the annual premiums for women who have been treated for stage-1 breast cancer and men who have been treated for prostate cancer, been operated on and have a good prognosis. Prudential Insurance Company announced its lowering premiums for people who have been successfully treated for heart disease. Prudential Financial lowered premiums for prostate cancer survivors several years ago, and it recently reduced rates for survivors of breast and bladder cancer, says Mike McFarland, a vice president at Prudential.

Though insurance companies have reduced rates you must shop around. If you’re healthy, you still may not qualify for the best rates. If one of your parents suffered from a serious illness at an early age, or if you smoke you won’t get the best rates.

On a typical term policy, getting the lowest rate on premiums could save you $100 to $250 a year. Standards for preferred rates vary among insurers. Average annual rates for a 40-year-old non-smoker who buys a $500,000 10 Year Term Life policy with preferred rates since 1994:

1996 $660 – 1998 $515 – 2000 $480

2002 $395 – 2004 $375 – 2006 $352

Don’t you think it’s time to have your current life insurance policies reviewed?

Remember, Life is Getting Cheaper!




By: Herb Williams

Auto Insurance is a bouquet of different covers like liability insurance; collision insurance; comprehensive insurance; medical insurance; uninsured motorist insurance; rental reimbursement; towing and labor cost coverage; as well as gap coverage.

What is essential and what will protect a car owner from problems varies from state to state. It is advisable to insure for a little more than absolutely necessary. Insurance premiums can be prohibitively high so, as an informed consumer you must do your research thoroughly.

Golden rules:

• Access consumer information available on the state’s insurance department web site. Read all the guidelines and determine what coverage is required by you. Be sure to read the sample rates listed. This research will give you a fair idea of what the premiums are likely to be.

• Ask for quotes from at least three big players in the auto insurance business. Companies like Geico http://www.geico.com/ ; Amica http://www.amica.com/ ; State Farm http://www.statefarm.com/ ; and Allstate http://www.allstate.com/ .

• Find out what is the highest deductible permissible and if you can afford it. Generally increasing a deductible from US$ 200 to US$ 500 can reduce premiums payable by as much as 30 %.

• Evaluate the worth of your car. If it is old and worth less than US$ 2000 then you can consider opting out of collision and comprehensive coverage for the car. The premiums paid will be much higher than what you will collect. Ask the insurance companies to evaluate the market value of the car. Find out the worth of you car by using http://www.kbb.com/ the site of Kelley Blue Book.

• Use common sense when buying a car. Be sure to choose one that does not require higher insurance premiums. It is important to not just consider buying costs but cost of insurance too.

• Find out if the insurance company has a scheme that offers discounts on the basis of lower usage or mileage. Some companies offer discounts if you utilize public transport to go to work. They require you to submit proof that you do.

• Ensure that your insurance credit history is accurate. Many insurers use credit history as a basis to calculate premiums.

• Study the laws of the state where you live. Find out whether any further adjustments in premiums can be made because you car if fitted with: airlock brakes, air bags, and other safety features. Find out from the companies as well as your agent.

• Find out whether membership to organizations like American Automobile Association makes you eligible for any discounts. Ask about trade, professional associations, and corporate benefit’s program. Some companies offer: student’s discounts for students with a GPA of 3.0 and higher; retirement discounts; loyalty discounts and more.

• Be sure to ask the insurer if they have schemes to insure mare than one car under a group scheme. Such schemes referred to as multiline discounts have a huge umbrella of options, home insurance, safety features, accident free driving, driver over 50 years old, anti-theft devices fixed, and so on.

For ready reference see:

• Insure.com at http://info.insure.com/auto/autosave.html has useful information, a privacy policy in place, is updated daily, has links to over 200 companies that sell various kinds of insurance, a toll free line, and an option to buy insurance online.

• Independent Insurance Agents and Brokers of America at http://www.iiaa.org/na/default?ContentPreference=NA&ActiveTab=NA&ActiveState=0 is one of the largest associations of independent insurance agents and brokers. According to experts buying auto insurance from agents can get you a good deal as it cuts out the middleman.

• InsWeb at http://www.insweb.com/ a site dedicated to the lowering of insurance costs. Offers competitive quotes from big players in the market like The Hartford, GMAC, AIG, Travelers, Amica, and Liberty Mutual.

Remember insurance premiums are higher for high performance cars. The premium depends on how high repair costs are, ready availability of parts, and what the chances of car theft are. Buy a car that does not require higher insurance premiums and explore the market for the best deals.




By: Paul Wilson

Money Morning Staff Reports

Embattled U.S. insurer American International Group Inc (AIG) is looking to sell its Hartford Steam Boiler Inspection and Insurance Co. unit to Germany’s Munich Re Group AG, the world’s second-largest reinsurance company, a source familiar with the negotiations told Reuters yesterday (Sunday).

The unit could fetch between $700 million and $1 billion, Reuters said. The Washington Journal said the price being talked about is actually in the range of $1.2 billion to $1.5 billion. The negotiations are continuing and the timing of any deal is unknown.

AIG, which bought Hartford Steam Boiler, or HSB, for around $1.2 billion in 2000, is under pressure to sell assets around the world to pay off a huge government loan. The U.S. government saved AIG from bankruptcy in September with a rescue plan that has since ballooned to about $152 billion (the government had to boost the value of the bailout package back in November after the company deteriorated faster than had been expected). AIG has several years to repay the loans, but the company is trying to sell businesses as quickly as possible, both to free itself from the interest it is paying to the government and to avoid further deterioration in the value of its assets.

That is forcing AIG – which has 74 million customers and 116,000 employees in 130 countries – to shed or sell stakes in units globally. AIG said in October that HSB would be among the assets it would sell to repay the federal government. In fact, the Hartford Steam Boiler deal would actually be AIG’s first major divestiture as it seeks to repay as much as $60 billion in loans that it received as part of the September government rescue package, sources familiar with the situation told The Wall Street Journal.

However, as AIG moves to sell assets to repay the loan, it faces the twin challenges of its own weakness and the global credit crisis, which has made it difficult – if not impossible – for interested suitors to obtain financing for buyouts or other high-dollar projects.

Hartford Steam Boiler insures steam boilers around the world. It also offers inspection services and engineering consulting. It provides insurance for a range of risks, including insurance to cover the cost of lost business and the cost of needed repairs when equipment breaks down. The company was founded in 1866.

Founded in 1880 in Munich, Münchener Rückversicherungs-Gesellschaft AG, or Munich Re, provides reinsurance coverage to traditional insurance companies in 150 countries, for everything from oil rigs to satellites and hurricanes.

AIG shares closed Friday at $1.60 each. They’ve traded as high as $60.04 in the past 12 months.

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By: Money Morning