Right now may be the best time to lock in a low rate on term life insurance. American General Life Insurance Company and ING ReliaStar Life Insurance Company have both recently announced price increases on their term life insurance products for this summer. Prudential, West Coast Life Insurance Company, Banner Life Insurance Company and many others have already increased premiums on term life insurance policies this year.
Life insurance companies continue to struggle with higher credit and reinsurance costs due to tighter credit markets. These companies have seen their costs for maintaining capital reserves skyrocket as a result. Capital reserves requirements are set by insurance regulators and are meant to protect consumers by ensuring life insurance companies keep adequate funds on hand to meet policyholder claims and benefits.
The increased costs are now being passed along to consumers in the form of higher premiums. Although we may have seen the bottom on term life insurance premiums for the foreseeable future, premiums are still considerably less than they were just a few short years ago. This is due mostly to a steady decrease in premiums over the past several years, as the industry has become more efficient and mortality rates have improved.