We hear plenty of talk these days about the effects of historically low interest rates on everything from housing costs to voting behavior, but what about life insurance? Though today’s low interest rates might help you refinance your home or even purchase your dream car, they just might keep you from locking in a 30 year term life insurance policy.
The Disappearing 30 Year Term
Though it may not be the first industry that comes to mind when you consider those effect by fluctuations in interest rates, the success of the life insurance industry is tied directly to the bond market. In essence, insurance carriers are in the business of investing. Profits are invested across a variety of channels enabling carriers in turn to write more policies and take on more risk. When life insurance carriers are seeing low return on those investments they are forced to reevaluate and reduce financial risk. In fact, according to a recent report from Towers Watson, 45% of CFO’s surveyed considered a prolonged low interest rate environment to be the greatest threat to the insurance business. *
Just a few short years ago, when interests rates were high and profits were healthy, the 30 year term life insurance policy was a standard product offering. Though you can still find plenty of carriers who offer 30 year terms, some of the industry’s biggest players are writing less 25 and 30 year term life insurance policies while others have dropped them all together. Industry giants Genworth and AXA Equitable stopped offering their 30 year term life insurance products earlier this year. ING followed suit in late July dropping both their 25 and 30 year products. The insurance carriers that continue to offer 30 year term policies continue to increase rates as necessary in the current market.
There’s No Time Like the Present
What does this mean for you? If you are interested in purchasing a longer term product, now might be the time to buy. Those with young families or other long term financial responsibilities often plan to purchase term life insurance coverage…eventually. If you fall into this category, we urge you to compare your options at sooner rather than later. You may be surprised to learn just how affordable a 25 or even 30 term life insurance policy can be. With no obligation to buy, why not request a quote comparison today?
At IntelliQuote we have a staff of highly experienced, license life insurance agents on hand to answer your questions and help you understand your options. Ready to get started? Contact us today.
Interested in learning about your term insurance options? We encourage you follow our Life Insurance Blog; keep up with the industry trend and topics that affect you and your family. While you’re here, check out these recent related posts: