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Term insurance rates on the rise

Posted by Jill Boynton  June 10, 2009 10:08 AM

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Yesterday the Wall Street Journal reported that term life insurance rates, after years of falling, are now reversing course and starting to go up. It may be time to re-evaluate your life insurance need and lock in the proper amount.

Consumers have benefited over the last 20 years as term life rates have been falling. This was largely due to improved mortality tables and more competition in the industry from the introduction of web-based insurance sales. But that trend changed earlier this year as many companies announced premium increases, largely thanks to the recent credit crisis. With tighter credit lending, insurance companies have had to pay more to borrow money to maintain their required cash reserves. In addition insurers are receiving lower returns on their investments just like the rest of investors, which makes it harder for them to maintain reserves and cover their expenses.

Now is a good time to take a look at your life insurance coverage. If your policy doesn't provide enough coverage, is annually renewable or has a level term that ends too early, you should think about adding to or replacing your policy. Applications can take weeks to get approved and your rate is not locked in until you receive approval so don't delay. In addition your health and age affect your rating, more good reasons to get the coverage you need as early as possible. However it is very important not to cancel your current insurance until a new policy is in place.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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