Record Falling Sales for U.S. Life Insurance

U.S. life insurance sales are
in freefall, just like these guys.

U.S. life insurance sales took their biggest six-month decline since 1942, according to LIMRA International.

Bloomberg News reports that indvidual life insurance sales have dropped 20% in the second quarter of 2009 because savers shunned investments linked to stocks.

In Canada, LIMRA reports a different story. While sales of universal life policies have fallen 14% compared to the same six-month time period just a year ago, advisors have been able to use steady term life and whole life policy sales to offset those losses. All told, there has only been a 1% decline in annualized premiums so far in 2009.

While there is no question consumers across North America are on a tighter budget, life insurance still remains the foundation of most financial plans. Without adequate life insurance, an unexpected death can create a financial tsunami in the average household. Life insurance provides the financial safety net all families need to get from point A to point B.

Of course, that doesn’t mean you can’t still save money on your policy. The following are six great ways to save money on your life insurance:

Avoid accidental death insurance – Many Canadian insurance companies heavily market accidental death insurance to unsuspecting consumers. Accidental death is heavily profitable for these companies, but provides only rare benifit to the consumer because fewer than 3% of all life insurance claims are paid out thanks to death-by-accident. Accidental death insurance can sometimes cost more than an equivalent term policy.

Watch out for captive agents – A captive agent is only allowed to sell his/her company’s own products. Insurance companies employing captive agents generally charge higher premiums than the companies 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.

The cheapest policy is not always the least expensive – This concept may seem contradictary, but when analyzing your life insurance premiums, remember that overall cost is more important than the initial premium. Many insurance companies try to lure clients with low initial premiums. Term insurance policies, which offer low initial premiums that increase as the insured ages, are appropriate if used for temporary insurance needs. The problem is, many brokers employ a one-size-fits-all philosophy. They don’t take enough time to assess why you’re looking for insurance, or how long you’ll need it.

Look for a company that offers preferred rates – The difference between preferred and standard rates can be very significant, especially for term policies. A 40-year-old male, non-smoker would pay $62.55/month with Equitable Life for standard rates on a $500,000 Term 20 policy. The plan would cost $44.55/month if the same applicant qualified for perferred rates. Click this link to see if you qualify for your own preferred rate.

Make sure you are not over insured – Our Needs Analysis Calculator will give you an excellent barometer of your own insurance needs and help you determine if you are over-insured.

Work with an independent broker – However, you must make sure he/she has access to a full breadth of companies, not just two or three. Get a free instant quote by following this link, or give us a call at 1.866.899.4849.

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