Comments on: What’s Your Objection to Term Life Insurance? http://nowmagazines.com/2009/07/30/whats-your-objection-to-term-life-insurance/ Bringing the best of our community home Wed, 06 Apr 2011 01:47:30 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Randy Smith http://nowmagazines.com/2009/07/30/whats-your-objection-to-term-life-insurance/comment-page-1/#comment-3 Randy Smith Fri, 07 Aug 2009 16:22:21 +0000 http://nowmagazines.com/?p=303#comment-3 Adam makes a good case for the need for life insurance, but glosses over the fact that one's insurability decreases as one ages. A 42 year-old bread winner with a few college-bound teenagers faces the prospect of not being able to repurchase a term policy after buying a 20 year policy at age 22. ("...insurers also have taken a harder stance on medical underwriting guidelines, experts say."-from 6/28/09 WSJ article referenced below). A person would be wise to look at a term policy that offers coverage well beyond a 20 or 30 year period. It gives the person options later in life that an uninsurable condition that would prohibit renewing an expiring 20 or 30 year policy. Also, there was a headline WSJ stories on June 6 & 28 (http://online.wsj.com/article/SB124450333064895949.html and http://online.wsj.com/article/SB124614721578265053.html) that talked about insurers either discontinuing sales of return of premium policies or raising premiums as much as 35%. ("They cite higher capital and reinsurance costs linked to tighter credit markets, which are making it costlier to maintain needed cash reserves, combined with lower investment returns.") He should have mentioned permanent, whole life policies. They guarantee a person coverage for life and can even build value as an asset to supplement their retirement or pay for long term care insurance. A person should start looking first at the AAA rated mutual insurers for this type of policy since they can return the most to holders of permanent policies. While these policies require a much greater premium commitment, they can become a "forced saving" plan that so many people need and have gotten away from since the days of our grandparents! Lastly, the death benefit continues to grow, as guaranteed by the financial promise of the insurer (hence, the AAA financial rating recommendation). Adam makes a good case for the need for life insurance, but glosses over the fact that one’s insurability decreases as one ages. A 42 year-old bread winner with a few college-bound teenagers faces the prospect of not being able to repurchase a term policy after buying a 20 year policy at age 22. (“…insurers also have taken a harder stance on medical underwriting guidelines, experts say.”-from 6/28/09 WSJ article referenced below). A person would be wise to look at a term policy that offers coverage well beyond a 20 or 30 year period. It gives the person options later in life that an uninsurable condition that would prohibit renewing an expiring 20 or 30 year policy.

Also, there was a headline WSJ stories on June 6 & 28 (http://online.wsj.com/article/SB124450333064895949.html and http://online.wsj.com/article/SB124614721578265053.html) that talked about insurers either discontinuing sales of return of premium policies or raising premiums as much as 35%. (“They cite higher capital and reinsurance costs linked to tighter credit markets, which are making it costlier to maintain needed cash reserves, combined with lower investment returns.”)

He should have mentioned permanent, whole life policies. They guarantee a person coverage for life and can even build value as an asset to supplement their retirement or pay for long term care insurance. A person should start looking first at the AAA rated mutual insurers for this type of policy since they can return the most to holders of permanent policies. While these policies require a much greater premium commitment, they can become a “forced saving” plan that so many people need and have gotten away from since the days of our grandparents! Lastly, the death benefit continues to grow, as guaranteed by the financial promise of the insurer (hence, the AAA financial rating recommendation).

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