Life insurance is something that is often times not kept during retirement years.   With the opportunity to presumably self insure at that point, many people will drop their term or let it expire.   While this is a strategy of many, it is not always the best one to pursue.   You may assume you don’t need or want life insurance after retirement, but how do you truly know how you will feel when you reach that age.

We speak to clients everyday that are looking to qualify for coverage that are 60 years old and over.   They consistently say that they wish they had bought when they were younger or planned for some coverage into retirement.  With that being said, it is certainly very possible to still qualify for coverage and the premiums will be determined by health.  Premiums have become more and more affordable due to life expectancy increasing.

The amount of coverage and reason for coverage may be totally different than when the client was 35.  At 35, they might have had a primary focus of replacing income if a premature death occurred.   At 65, income replacement might be less important and it might be about estate planning, mortgage protection, and final expenses.    When you are looking at your financial plan it is important to consider changing items of importance in your life.   It is always a good idea to look at your plan every year or two, to make sure nothing has changed.  If something has changed it may be something to address, or it may simply be something to keep in mind going forward.

Since term life insurance is basically a commodity the life insurance carriers have had to make it very affordable to compete.   The ability to keep it cheap is centered around a few factors.   One is that the insurance companies rarely ever pay a death claim on a term policy.   Typically, less than two percent of people with term policies ever make a claim.    Since so few people actually die, it is a big money maker for the life insurance company.    It is a win for the consumer because they were able to get a good amount of coverage for a very reasonable price.

The other big factor in keeping the premiums down is that fact that life expectancy has increased.   People are living longer and that contributes to being able to offer reasonable rates to an aging population.   Over the last few years rates have come down to the lowest they have ever been.  In the last couple years, we have seen some companies have modest price increases due to their overall portfolio taking a hit financially.  To make up for their losses elsewhere they had to charge a little bit more for life coverage.

Another main reason, that rates are so cheap is the amount of competition.   With so many carriers offering life insurance at competitive rates, it is imperative to be in that ballpark to be successful selling term.  Some carriers are not trying to compete with their term products as their focus might be on high quality permanent plans.

The good news about purchasing life insurance today is that people are living longer than ever before and the mortality rates have gone down.   The average male and female are living longer than they ever have before.

The benefit to the customer buying life insurance is that longer life expectancy creates lower rates.   Since 2000 the  average term policy rate has gone down about 4% a year.  The rates have also gone down due to insurance company’s being more selective on who qualifies based on health and the tremendous competition between company’s.

If a term policy was bought 3 or 4 years ago, it is worth taking a look at what the policy would cost you today and it might make sense to re-apply.   The most popular type of term insurance is level term with a term of 20 or 30 years.  The insurance company guarantees that the premiums remain the same for that period.    If you can lock into a lower rate than it can make a big difference over 20 years.   It is also important to select a company not just on rate, but one that has a good financial rating.   If the company doesn’t have at least a A rating,  it is probably a good idea to keep looking.

You can read a lot of good information about life insurance and mortality rates at  http://www.iii.org.