September was Life Insurance Month…Better Jump on that NOW

Life insurance premiums may increase soon…Some have gone up already. What’s going on?

Over the past century life insurance premiums steadily decreased in the USA as our life expectancies increased and ownership of life insurance policies continued to grow year over year. Add in favorable returns on life insurance companies’ investment portfolios, lower administrative costs resulting from replacing clerical tasks with software programs, the “law of large numbers” plus a couple other factors to make ownership of life insurance affordable to Jane and Joe Average.

Today, the ownership of life insurance curve has flattened ( a subject for another day…perhaps a fleeing from responsibility by our under forties?)

Life Insurance companies rely on returns from their investment portfolios to create the cash to pay death benefits, and those returns are less today due to government restrictions on what, where and how much of their portfolio may be directed. For instance, only a small percentage may be invested in equities (common stock), so they have not been able to take advantage of the recent stock market run up….Needing safe, long term investment havens, large amounts may be directed to highly rated bonds or packages of residential mortgage loans, returns on which are a fraction of what the were only a few years ago.

So how do they make up the difference?… Obviously, raise the price of the product. Get ready. It’s coming.

Be proactive. Call your Life Insurance Agent now to lock up today’s most affordable life insurance premiums.

Carp Diem