Term Life Insurance Lowdown

Term Life Insurance Cited As One Of The Hottest Products In The Latest Fitch Ratings

Fitch Ratings today released its annual 2005 Review and 2006 Outlook for the U.S. insurance industry. As per the ratings, term life insurance is one of the hottest products in the life industry. A product like term life insurance can create reserving and capital changes for insurers which can be addressed by scale, said Julie Burke, managing director, Fitch Ratings. Businesswire.com reports:

The recent trends and developments have further highlighted the need for the scale in the life industry. Also, franchise, size, scale, and diversity are seen as a means of competitive advantage for life insurers.

Term Life Insurance Rates Expected To Drop by Another 3 Percent in 2006

According to the Insurance Information Institute, term life insurance rates are expected to drop by another 3 percent in 2006. The rates have already been falling sharply. In the recent past consumers have had a remarkable opportunity to refinance their home mortgage because of low interest rates. But the opportunity is fading slowly fading away and the consumers need to refinance their term life insurance. Courant.com reports:

According to the estimation of AccuQuote.com, an online rate comparison service, a policy that costed $1,300 in the year 1994 will cost just $641 in the coming year. Bryon Udell, founder and chief executive of AccuQuote says “It's been a remarkable drop". People having policies that started before 1999 are going to benefit hugely.

Jefferson Pilot Financial introduces Paycheck Plus

Jefferson Pilot Financial, one of the nation’s leading providers of universal and variable universal life insurance, fixed annuities and employee benefits, Omaha, NE has announced the introduction of “Paycheck Plus”. Term life insurance is covered under this paycheck plus at an economic group rate. Term life insurance covers the event of untimely death. If an accident results in loss of life, the AD&D benefit will be paid to the beneficiary in addition to the term life benefit. Paypershop.cm reports:

The Paycheck Plus package is underwritten by Jefferson Pilot Financial Insurance Company, one of the nation’s top group insurance providers. Paycheck plus is a comprehensive package of voluntary income protection benefits that provides four lines of coverage within a single group rate.

China Life Insurance Increases Rates for Term Life Product

China Life Insurance Co. has reportedly increased the prices of two categories of insurance products prior to the release of the new life table by China Insurance Regulatory Commission, the China’s insurance regulatory body. China Life is to increase the premium rate on Kangning Term by 30% before December 10 2005.

Life table, premium rate and interest rate are three major factors that influence price decision. The implementation of the new life table will have an effect on pricing for annuity, term life insurance and whole life insurance.

Kanetix Launches New Term Life Insurance Quote Service

Kanetix, Canada's leading insurance marketplace, recently launched a new term life insurance quote service, with standard and preferred rates highlighted for insurance shoppers. The quotes are reportedly in an easy-to-read and comparables format.

Available on quotes for coverage of $250,000 or more, preferred rates can result in saving of up to 30% off the standard rate. The company has outlined that close to 50% of the people applying for life insurance coverage through the portal are likely to benefit from some savings. This piece of statistics is reportedly based on past experience of the portal. The portal would allow shoppers to review the price range offered and make an informed choice. insurance-canada reports:

Kanetix believes in providing easy-to-use and informative online tools for consumers to shop for their insurance quotes," said Gregory Ellis, co-founder of kanetix. "By showing the preferred and standard rate life insurance quotes together instantly, consumers can easily see which companies offer the best standard rates and the best preferred rates. Since they are often not the same company, consumers can, at a glance, make an informed choice about which insurer will offer them the most affordable coverage.

Term Life Insurance Rates Could Plummet

According to the Insurance Information Institute, a New York-based not-for-profit organization backed by insurance companies, the price of term life insurance policies is expected to decline by about 3 percent during 2006. The expected drop in price is due to competition and also the fact that life expectancy has improved. iii reports:

The institute estimated that the annual premium for a 40-year-old male buying a $500,000 term policy in 2006 is $641 as long as he qualifies as a standard risk. Rates are lower for women, who, according to the insurance industry, live longer.

Impact of Proposed Tax Reforms

The proposed tax reform bill, which is speculated to do away with many of the tax sops of life insurance, is likely to have a considerable impact on the insurance sector. However, the term life insurance segment is expected to benefit if such reforms are rolled out.

Leading industry organizations have issued a joint statement forewarning policymakers against tampering with the investment aspects of life insurance products. The potential impact of such reforms could be drop in the investment levels - with people only opting for term life insurance to retain coverage.

Read More: Proposed Tax Reforms