The biggest driving force behind cheaper life insurance is
simple; people are living longer. With all the advancements in
technology and medicine people have been experiencing longer life spans,
thus longer life expectancy. Life insurance companies are passing this
new savings onto the consumer. What they aren't complaining about is
some of the old policies that many consumers continue to keep in place
and continue to pay. They are profiting off of the consumers paying more
than they need to for life insurance
.
There was a huge change that took place in the industry recently. This was driven by a new rule for calculating insurance costs that went into effect January 2009. The Insurance Information Institute says that term life insurance premiums are now 50 percent lower than they were a decade ago.
What Happened In January 20012
...
The mortality tables changed. Effective January 2009, all life insurance companies must use the Commissioners 2001 Standard Ordinary Mortality (CSO) table to calculate insurance rates on new policies. This is an update to the Commissioners 1980 Standard Ordinary Mortality (CSO) table that was previously used. Under the new 2001 CSO, the average 65-year-old male is expected to live to age 81, up from 78 under the previous table. Meanwhile, a 65-year-old female is expected to live to age 85 today, compared with 81 under the old table. The average consumer isn't even aware of this. The insurance companies aren't coming out and saying "it's cheaper to get a new policy today". It
becomes up to the insurance agents to communicate this to the consumers. With such a high turnover rate in the industry as well as a pretty uniform misunderstanding of the products, there has been a huge disconnect between the insurance companies and the consumers.
What is the Downside...
With every positive there must be negative right? The biggest downside to this is seen in cash value life insurance. The IRS has rules and restrictions about how much money can go into permanent life insurance policies. This makes the design and funding of permanent and cash value policies all that much more critical. The typical agent doesn't fully understand these concepts properly and could end up doing one of two things: leaving you paying more costs and fees than necessary or leaving you with a tax nightmare that you weren't prepared for.
Finally... It is easier than ever to save money on your policies. With cash value life insurance policies it has become even more important to work with a qualified professional that truly understands the type of policy that you have and the funding that is available. Please make sure you are putting yourself in the best situation.
There was a huge change that took place in the industry recently. This was driven by a new rule for calculating insurance costs that went into effect January 2009. The Insurance Information Institute says that term life insurance premiums are now 50 percent lower than they were a decade ago.
What Happened In January 20012
...
The mortality tables changed. Effective January 2009, all life insurance companies must use the Commissioners 2001 Standard Ordinary Mortality (CSO) table to calculate insurance rates on new policies. This is an update to the Commissioners 1980 Standard Ordinary Mortality (CSO) table that was previously used. Under the new 2001 CSO, the average 65-year-old male is expected to live to age 81, up from 78 under the previous table. Meanwhile, a 65-year-old female is expected to live to age 85 today, compared with 81 under the old table. The average consumer isn't even aware of this. The insurance companies aren't coming out and saying "it's cheaper to get a new policy today". It
becomes up to the insurance agents to communicate this to the consumers. With such a high turnover rate in the industry as well as a pretty uniform misunderstanding of the products, there has been a huge disconnect between the insurance companies and the consumers.
What is the Downside...
With every positive there must be negative right? The biggest downside to this is seen in cash value life insurance. The IRS has rules and restrictions about how much money can go into permanent life insurance policies. This makes the design and funding of permanent and cash value policies all that much more critical. The typical agent doesn't fully understand these concepts properly and could end up doing one of two things: leaving you paying more costs and fees than necessary or leaving you with a tax nightmare that you weren't prepared for.
Finally... It is easier than ever to save money on your policies. With cash value life insurance policies it has become even more important to work with a qualified professional that truly understands the type of policy that you have and the funding that is available. Please make sure you are putting yourself in the best situation.
The Baron group operates in Monroe Louisiana and is managed by
Timothy Mobley. We represent some of the best insurance companies in the
world in the products we offer to our Louisiana clients.
We currently represent AIG Americo, Old Mutual, American Equity Investment Life, US financial, Presidential Life, Shenandoah Life, Assurant Health, Chesapeake Life, World Insurance, Wellcare and Pyramid.
Tim Mobley is a Louisiana licensed professional with over twenty years of experience in a wide range of financial products. Tim is committed to recommending the services and products that best suit the stated financial needs and objectives of a variety of individuals. Timothy Mobley is involved in numerous associations and foundations. He is a member of the Leukemia and Lymphoma Society and Lance Armstrong Cancer Foundation, and the Challenged Athlete Foundation (CAF). Tim is also
We currently represent AIG Americo, Old Mutual, American Equity Investment Life, US financial, Presidential Life, Shenandoah Life, Assurant Health, Chesapeake Life, World Insurance, Wellcare and Pyramid.
Tim Mobley is a Louisiana licensed professional with over twenty years of experience in a wide range of financial products. Tim is committed to recommending the services and products that best suit the stated financial needs and objectives of a variety of individuals. Timothy Mobley is involved in numerous associations and foundations. He is a member of the Leukemia and Lymphoma Society and Lance Armstrong Cancer Foundation, and the Challenged Athlete Foundation (CAF). Tim is also
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