Economy having an impact on life insurance rates

A difficult economy is forcing more life insurance companies to raise rates, which suggests that consumers who want to lock in low premium prices should act soon.

A difficult economy is forcing more life insurance companies to raise rates, which suggests that consumers who want to lock in low premium prices should act soon.

A report in the Chicago Tribune notes that insurance companies have been hit by tough financial markets that have strained their bottom lines, as well as requirements for the companies to have sufficient credit for making payouts in their reserves.

Up to now, the Tribune reports, prices for a term life insurance policy had fallen to nearly half what they cost in the early 1990s. In the previous market conditions, consumers would even frequently cancel their old policies to take advantage of lower-priced ones that could pay significantly more.

With that in mind, the article advises consumers to lock in low rates while they can, especially since costs tend to go up with age. The newspaper also suggests purchasing policies with longer terms and taking more time to shop around for reasonably priced premiums.

One potentially risky decision that consumers are generally advised not to make is to go without life insurance, especially if they have families. Typically, financial experts suggest carrying insurance policies that provide coverage equivalent to six to eight years of one's income.

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Posted: July 13, 2009

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