Wednesday, October 14, 2009

Record Declining Sales for US Life Insurance

US life insurance sales took their biggest six-month decline since 1942, reported by LIMRA International. The current news from Bloomberg show that people have lost hope in investments associated to stocks which is having a knock on effect on sales of individual life insurance.

This however is a totally different story in Canada. While sales of universal life policies have declined 14% compared to the same six-month time span just a year ago, advisers have been able to use steady term life and whole life policy sales to offset those losses. Annual premiums in general have witnessed only a 1% drop this year.

A personal budget may be more rigid in the US, but the best part of US citizens will still have life insurance as the basis of their financial planning. Without decent life insurance, an unexpected death can create a financial tsunami in the normal household. For family members left behind, life insurance policies give security from financial worries.

Of course, that doesn't mean you can't still save cash on your scheme. The following are six brilliant ways to save cash on your life insurance.

One kind of policy to refrain from is accidental death insurance. This is the main type of policy to be sold by Canadian insurance companies to people that don't really require it. Accidental death is extremely profitable for these companies, but provides only rare benefit to the consumer because lower than 3% of all life insurance claims are paid out thanks to death-by-accident. When comparing this policy to a term policy the majority of the time the term policy costs less.

Be wary of captive agents. They can only sell that company's products. Insurance companies employing captive agents generally charge higher premiums than the organizations employing independent brokers do. Captive agents cannot shop the market for the best value for you and, in some instances, may not offer the product best suited to your needs.

Just because a premiums seems low cost, it doesn't mean that it works out the cheapest. The start up premiums could be cheap, but work out the complete cost as it could be more expensive than acquiring a slightly higher priced policy in the first case. Start up offers such as low start up premiums are incentives used by insurance companies to lure you in. Term insurance policies, which offer low start up premiums that grow as the insured ages, are pertinent if used for temporary insurance needs. The main problem with this philosophy is we are not all the same, nor do we all have the same requirements. They don't take alot of time to examine why you're seeking insurance, or how long you'll need it.

See if you can uncover a company offering preferred rates. When it comes to standard or preferred term premiums there can be a telling difference is cost. A 40-year-old man, non-smoker would hand over $62.55/month with Equitable Life for standard rates on a $500,000 Term 20 policy. Taking the same details, using the preferred rates this policy would cost just about $20 less. Click this link to see if you are eligible for your own preferred policy.

Be very careful that you have not got too much insurance. By making use of our Needs Analysis Calculator you can observe at a brief look whether you are over or under insured.

Don't try and go it by yourself, work with an independent broker. A broker that has access to the whole insurance market is more likely to accomplish your requirements than someone who has only got access to their own company or one or two others.

Photo source: Jonathon Colman

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