This article was in USA Today last week. I’ve mentioned how term rates are increasing, but it also seems that other insurance policies are also on the rise.  Here’s the article in full by Kathy Chu and Sandra Block of USA Today. In honor of full disclosure, AccuQuote was mentioned and I was quoted in this article regarding life insurance rates.

Home, car and life insurance prices are climbing as insurers grapple with lower investment returns and profits.

The cost of a typical auto insurance policy will rise 4% to $875 this year, on top of a 3% increase last year, according to the Insurance Information Institute, a trade group. Consumers also will pay more for homeowners insurance: The average policy will jump 3% to $841. And term life insurance rates are rising after several years of declines.

TELL US: Are you paying more for insurance?

The price increases come as consumers struggle – the unemployment rate has reached 8.5%, and household wealth has plunged with investment portfolios and home prices.

In this economy, “Anything that costs more is difficult for consumers,” says J. Robert Hunter, director of insurance for the Consumer Federation of America.

The industry’s profits come from insurance policies and investment returns, says Terri Vaughan, chief executive of the National Association of Insurance Commissioners. That’s why, “If your expectations for future investment income are lower, that’s going to affect premiums.”

Insurers collect premiums from consumers and invest the majority in bonds, the rest in stocks. Their portfolios have been under pressure amid volatile stock and bond returns.

For instance, yields on ultra-safe Treasury securities – in high demand amid the economic turmoil – plunged in 2008. Meanwhile, the Dow Jones industrial average is down 43% from its all-time high of 14,165 on Oct. 9, 2007. Treasury securities and stocks have regained some ground recently, however.

As the economy weakens, insurance rates could climb further. Insurers “cannot assume that interest rates will be much higher and stock returns much better in the foreseeable future,” says Robert Hartwig, president of the Insurance Information Institute.

In the life insurance industry, weak profits, higher reserve requirements and increased capital costs are reversing a more than decade-long trend of falling term life prices, says Byron Udell, chief executive of AccuQuote, an online insurance broker.

Udell predicts average term life rates will be 5% to 10% higher at this time next year. Banner Life Insurance raised rates this year, he says. Prudential and ING have notified AccuQuote they’ll raise rates in coming weeks.

The rate increases – typically 2% to 6% – are significant because these three insurers are major players that frequently offer lower premiums than their competitors, Udell says.

According to a newly-released Russell Research study almost 90 percent of Americans are concerned about one or more personal matters from a legal standpoint. The study reports nearly 70 percent have experienced at least one legal event in the past year and the vast majority – about 75 percent – don’t have a plan to deal with legal issues that can occur.

At AccuQuote, we’re not just working hard to provide you with affordable life insurance, but also save you money in all areas of your life, not just with your life insurance. This is a great time to remind you that our partnership with LegalZoom allows us to provide you with a $10 discount on any product including ones that can help you create your will, living trust and power of attorney documents. Experts suggest that spring is a great time to review your current documents.  Click here to take advantage of this offer.

The following is an email from one of AccuQuote’s sales managers that went out to the sales floor.  Over time, as sales people we all have brushes with stories like this.  The fact is, as part of an elite group of professionals that make their living selling term life insurance, we have a serious responsibility to be GOOD AT WHAT WE DO!  If we aren’t, lots of people remain unprotected.  Our work is more important than most of our clients realize.  No one else in their life is going to make the case for life insurance.  Not their kids.  Not their spouse.  It’s all on US!

By getting people to own life insurance, we are providing them a great service.  Some of them will die with this coverage in force.  And when they do, we instantly have become the most important person they ever spoke with.

Unfortunately, some of those that we let “get away” without obtaining coverage will also die.  (Remember, we’re ALL going to die!)  And when they do, their family is often times (pardon my language) screwed.  Period.  And then, as agents, we have to come to grips with the fact that if we were just a little better at selling life insurance, their surviving spouse and children would have a chance at a less difficult life.

We are very lucky to be able to make our living doing such important work.  I think the following email will show everyone our true passion for life insurance – this is what differentiates us from the competition. I’m proud that my employees share this same passion.

From: Chris Klauck
Sent: Wed 4/22/2009 8:50 AM
Subject: Why we do what we do.

No one is better than you to give them the reasons to get Life Insurance now.

This weekend, my girlfriend’s half brother was killed in a car accident. He left behind a wife that doesn’t work and a 2-year-old daughter. He was 37 and he had no savings to speak of. The sad part is that he worked as a handy man and was on his way to a job to get the money to be able to fly out to join his wife, who is with her dying mother. The only car they own is totaled and without insurance, she doesn’t work and also has no savings to speak of either. Yet life insurance cost too much while he was alive…….

I was thinking about this all weekend. I logged into our system and looked up what an affordable life insurance policy would have cost for minimum coverage of a 37 year old in great health for 20 years. The cost was just over $300.00 a year, $25.00 a month. The real cost isn’t what they would have paid a month for insurance; it is the benefits his family would have had now. The family has lost a husband and father, both emotional and financial hardship to follow. We can’t stop the loss of a loved one, but we can help the family avoid the financial hardships they will face.

Our job as insurance agents isn’t only about fancy ways to overcome objections or the right words to say, it is about selling the benefit, protection for families. One of the best ways to do that is through personal stories that make people stop and think.  Overcoming objections and all the right words help, but nothing equates to getting on the customer’s level and making it personal. We all have stories; we all know someone that has suffered a tragic loss. What we don’t know is what life has in store for our customers. As Bill Rosenthal says, “You don’t need a reservation for the obituary column, they’ll make the room.” We all know what will happen if our customers don’t protect their families; it’s our job, our responsibility to make it matter.   It is up to us to make life insurance “important” to our customers; to make it personal and “real” for them, everyday and on every call.

Chris Klauck
Sales Manager

According to the Consumerist, a recent lawsuit was filed against Settlers Life Insurance. Curtis McCraw held a life insurance policy with Settlers Life Insurance at the time of his murder in April 2008. When his wife Stephanie McCraw attempted to claim the Accidental Death Benefit, Settlers denied her claim because her husband had “a pre-existing liver condition.”  This just goes to show why you should NEVER lie on your life insurance application about pre-existing conditions. Even though the claim says that being shot in the back by unknown assailants, the life insurance company found out that he had Hepatitis C and has every right to refuse paying out the term life insurance death benefit.

What’s the one most important thing you should insure?  I’ll give you a hint – it’s not term life insurance and it’s something we all take for granted.  What is it?  The ability to work.  That’s why disability insurance is VERY important.

May 1^st marks the beginning of Disability Insurance Awareness Month (DIAM), which is organized by the Life Insurance Foundation for Education.

Just think about it.  Your income is by far your most valuable asset!  What would you do if you weren’t able to earn money for ninety days, a year, or even longer?  How would you pay for your mortgage, food, cars and other bills?  How long could you and your family survive?

Did you know that the odds of becoming disabled are 3 times higher than the odds of dying before age 65? In fact, statistics show that 1 in 4 families identified an illness or injury in their family as the major reason for bankruptcy.  And amazingly, 48 percent of all home mortgage foreclosures are due to a disability.

If you don’t have disability insurance, you’re not alone.  Eighty-two percent of Americans have little or no coverage.  The message is clear: people in their prime working years may be healthy and have all of the energy in the world, but they’re not safe from the threat of a disability.

Finding discount term life insurance isn’t hard if you know how to shop around. Here are several tips to keep in mind when buying a term life insurance policy.

• Ask the right questions – Talk with an expert that is familiar with multiple carriers’ underwriting rules. Such experts will know which carriers will bend their rules, and when.
• Deal with a broker – Brokerage firms, such as AccuQuote, know the ins and outs of several life insurance companies – and are in a position to know what each will or won’t do. Some of these carrier-specific underwriting rules are well known, but most are not, and don’t even show up in the carrier’s rate books or product brochures.
• Make sure you fess up – if you do anything extreme, such as sky dive on a regular basis, and don’t tell your life insurance company at the time of applying, they can refuse to pay the death claim should you die.
• Think about pursuing a policy that excludes your risky endeavor - Some insurers will allow you to purchase a policy, which states that if you perish while engaged in the excluded activity, your beneficiaries would not receive the death benefit. The advantage to this is that you would not pay extras above the cost of your policy.
• Educate yourself – Go to school, get a license, do all the safety things that you’re supposed to be doing and present yourself as an expert in skydiving.
• Notify your agent if you stop this activity – If you no longer are skydiving, contact your agent as you can save money immediately.

Finding and the right life insurance coverage can be a time consuming and complex process, especially if the individual looking to secure coverage has outstanding health issues and/or a lifestyle that includes activities deemed to be “high-risk.”  Clearly, this is not a “one-size-fits-all” proposition.  Depending on the specific medical condition or high-risk activity, it is not uncommon for one insurance company to charge significantly more than another.

That being said, you need not be in perfect health or live like a saint to get affordable life insurance coverage.  An educated consumer can still make the right choices by utilizing the best resources available to find the best values.  Often, the process can be a simple one and is just a matter of knowing the right places to look.  Asking the right questions of knowledgeable experts who are familiar with multiple carriers’ underwriting rules is critical.  Such experts will also know which carriers will bend their rules, and when.
For example, is it possible for a cigarette-smoking skydiver to get the lowest price on term life insurance?  Probably not, but it is no longer true that most types of bad habits, risky hobbies or medical conditions will automatically disqualify you for the lowest rates.  Both aggressive competition for customers and longer life spans have driven down the price of term life insurance, the simplest kind of coverage that lasts for a set amount of time and has no cash value. These are well known facts within the insurance industry.  What’s not well known is that many insurance companies grant individual exceptions for certain types of customers, effectively allowing them to qualify for lower rates than would seem possible, when other companies may not offer the same low rate.

Some of these carrier-specific underwriting rules are well known, but most are not, and don’t even show up in the carrier’s rate books or product brochures.  The only way to know about them is to deal with a broker who does a lot of business with several carriers – and is in a position to know what each will or won’t do.  This experience is critical because industry-wide, only about 30% of individuals qualify for the “preferred plus” rate class.

Another sector of society that is often affected by life insurance rates today are those who smoke cigars.  Many carriers typically will charge cigar smokers the same rate as cigarette smokers.  The good news is that there are still many well-known, highly rated, reputable life insurance companies which treat cigar use more favorably than cigarettes.  Some even offer these applicants their best “preferred” non-tobacco rates, assuming the applicant (1) discloses their nicotine use, and (2) can provide a nicotine-free urine specimen during their insurance exam.

Each week, I get a call from a client asking me if their term life insurance policy is going to payout should they die.  And, the recent news about the possibility of tapping into the TARP funds have rattled even more nerves.

The answer is your policy is safe.  Each state imposes a stringent financial-reporting requirements on life insurers to counterbalance liabilities and obligations with reserves. In addition, the states will take charge of an insurer that’s on the brink of insolvency, generally selling it to a stronger company that takes over policies. If liquidation should occur — and since 1983 only about 60 life- and health-insurance companies have gone broke, according to A.M. Best — policy holders are paid before vendors. If that falls short, state guaranty funds are in place to cover shortfalls.

Comparing all kinds of insurance, including term life insurance, can now be done quickly and efficiently with the help of the internet.  Websites such as AccuQuote, ComparisonMarket, and eHeathinsurance can assist you in every aspect of your insurance needs. Simply log on and receive multiple quotes from various reputable insurers. Most rate comparison services are free and require some basic information in order to obtain these rate comparisons.  And, most importantly, there is no obligation to buy.

Remember, price is important, but it’s also important to consider other factors, such as the financial stability of a carrier. If saving time and money is important, you should definitely take advantage of the convenience of comparing policies online.

April 17, 2009

Pros and cons of child life insurance

Description:

If you’re in the market for a life insurance policy for your child, there are some things you should consider.  In this podcast, Byron Udell, a life insurance and annuity industry expert, explains how to weigh the pros and cons of a child life insurance policy.

Size: 4.51 MB

Length: 4:56

Click here to download

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