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