After a 10 year term life insurance expires, should the premiums double for the next 10 years?
When we got our policies I was 24 and my wife was 29. We got our renewal notice for the next 10 years and they are now over twice as much. Is that common or just our insurance figuring they already have us so they will charge more? -Lupe
Tags: 10 Years, Insurance, Insurance Premiums, Term Insurance, Term Life Insurance
December 2nd, 2008 at 3:42 pm
It may be because your wife will be 40 soon and the premium increases with age, especially if she is the principle insuree.
December 5th, 2008 at 8:20 pm
Shop around for new term policies before you accept their renewal offer. I’d go for at least a 20 year level term policy (maybe even 30) if I were your age.
December 7th, 2008 at 7:04 pm
Term policy premiums are based on life expectancy. Before renewing your policy for a new term you should do several things:
1. Evaluate how much insurance you need now and how much you will need over the next 10-20 years.
2. Get quotes from other insurance companies for similar policies.
3. Consider different term policies, e.g. level term or reducing term.
You may not need as much insurance now as you did before. Or you may need more. Your insurance needs may decline over time as you accumulate private savings and investments. A reducing term policy cost less than level term.
You are wise to stay with term insurance. All others are term plus a savings feature. They earn bigger commissions for sales people but provide less benefit to you.
Sales people like to add a double indemnity clause for more money. Ask yourself do your heirs need more money if you die in an accident than if you die in bed?
December 8th, 2008 at 8:37 am
Well, they surely go up. If those are the GUARANTEED rates, then that’s what it is.
But you might be able to get a NEW policy, at a lower rate, IF you can be re-underwritten. Maybe even with the same company.
So, shop this out (but get all the shopping done before this payment is due!). And next time, get a 20 year term, guaranteed renewable and convertable. Because every time the term is up, the rate WILL increase, so lock it in for as long as you can.
December 9th, 2008 at 11:25 pm
It is time to shop for new coverage. This is common with term insurance.
If your health has stayed the same you can get new coverage for less than the existing coverage.