If smokers are waiting for lower premium costs they need to stop waiting. The trend for premiums is upward and smokers need to obtain policies which guarantee premiums for as long as they will need the coverage or quit smoking.
Nicholasville, KY (PRWEB) September 12, 2007
Compulife Software Inc. has added an important new feature to its http://www.term4sale.com web site called "History of Term Life insurance Premiums". The public can now see graphic images of the average month to month changes in term life insurance premiums for the last 10 years. The graphs cover 10, 20 and 30 year level term products for 5 classes of health.
A menu of the new graphs can be viewed at: http://www.term4sale.com/ratehistory.htm
Compulife president Bob Barney commented, "The guessing game is over. Contrary to common marketing claim that "term life insurance prices have never been lower", consumers can now see that premium costs, for certain term insurance products and health classes are actually higher than they were during the last decade. This should be a big wake up call for many consumers."
For the past 20 years Compulife Software Inc. has been providing the life insurance industry with the "Compulife Quotation System", an independent computer software program and database of life insurance products that lets insurance agents compare the premiums costs for the most popular forms of term life insurance. During those 20 years Compulife has amassed a history of monthly editions of its software which it has now organized into a single place making historical comparisons of premiums possible. Compulife has used its historical editions to take a look at average premiums over the past 10 years and it has graphed the results for the public to see.
An explanation of how Compulife created the graphs can be found at: http://www.term4sale.com/ratehistoryexplanation.htm
The graphs clearly show that while some premiums have steadily gotten lower, as is the case for 10 and 20 year term for Preferred and Preferred Plus Non-Smoker health risks, premium costs for many other examples have dipped then risen. The most glaring examples are the term life insurance premiums costs for smokers, which are clearly on the rise based upon the graphs supplied by Compulife.
Barney said, "If smokers are waiting for lower premium costs they need to stop waiting. The trend for premiums is upward and smokers need to obtain policies which guarantee premiums for as long as they will need the coverage or quit smoking."
But it isn't just smokers who are facing higher premiums. While 10 year term premiums for Preferred Plus Non-Smokers have steadily reduced during the decade with average premiums, for the lowest priced 6 companies in Compulife, dropping from about $400 to $200, the same pattern is not true for 30 year policies. The Preferred Plus 30 year premiums which went from approximately $950 in 1997, to a low of about $575 in 2002, are now up to about $650 in 2007.
Asked to explain what has happened Barney said, "There is more than one reason for the change but the most important is the negative impact of a government regulation called Triple-X. The regulation forces life insurance companies to carry higher reserves for level term products which guarantee premiums for longer than 10 years. I believe we are now witnessing the impact of that on the prices that consumers are paying for life insurance."
Life insurance reserves are the money which life insurance companies set aside to meet future obligations. Like other forms of insurance, regulators want to make sure that insurance companies keep enough money in their coffers to pay the future claims if the unthinkable happens. But Barney points out that having too much in reserve is also bad for the public because it is the public who pays for it through higher premiums. If it turns out that the reserves are not needed, it is the insurance company that inherits the leftovers.
Barney reasons, "Suppose government regulators said that they want all car insurance premiums to increase 15% to make sure that car insurers have more money to deal with the cost of car accidents. Do you think consumers would site idly by and accept that government intervention? But that is precisely what happened to the cost of 30 year level term. Consumers haven't noticed it because life insurance costs are below their radar."
But there are other contributing factors to the price changes reflected in the graphs. One thing that http://www.term4sale.com points out is that in 1997 Compulife was comparing the costs of over 160 life insurance companies. Today that number has shrunk to just over 125. Fewer players means less competition. The fewer the number of companies chasing the consumers' business, the less aggressively companies need to price their products.
Barney cautioned, "While understanding general pricing trends can be very useful information, there is no assurance that your particular policy was among the most competitively priced when you bought it. That's why http://www.term4sale.com is such an important resource. http://www.term4sale.com lets consumers instantly compare the insurance premiums of over 125 life insurance companies based upon their specific age and amount of insurance. There are no tricks or hidden sales gimmicks; Compulife does not sell life insurance. Consumers never have to identify themselves so there is no way they can be contacted later by an agent.
Barney added, "I would like consumers to think of Compulife and http://www.term4sale.com the way that they think of the Kelley Blue Book for used car values."