The current economy has placed a mindset on most Americans that precludes any unnecessary spending in an attempt to salvage their current financial status. If you do not have any life insurance in place at this time or your current policy is due to expire and you haven’t started a new application, you may be one of the many who have said “I can’t afford the policy right now, and I’m not planning on dying anytime soon”. While it’s generally a good idea to avoid planning your imminent death (insurance companies tend to frown on that kind of behavior) the fact remains that if you’re reading this you’ve established a need for life insurance, and that need will continue to exist regardless of future plans.

The policies are the direct obligations of the insurance company, not a holding company or prospective buyer. State guaranty associations exist to pay claims if a company should fail. Each state sets it's own face amount up to which it will fully cover a claim. Check with your state insurance commissioner's office to see the limit for your state.

So since we have an established need the question really becomes how to afford the coverage. And not only afford it, but also realize the financial advantages of a life policy.

First of all, current market trends - term life insurance rates have been historically low for quite some time, and current trends show that those rates are now going to increase. A number of companies have announced rate increases starting in March, by margins as high as 50% on 20 year and longer policies. If you’ve been thinking about getting started, now’s the time to place an application in underwriting (once in underwriting the policy will reflect previous rates). Note – Any policy currently in force has guaranteed rates that will not change during the lifetime of the policy.

As far as affordability goes, consider the benefits of a life policy. Many people saw their retirement assets plummet with the economic downturn, and a subsequent decline in net worth. If you were counting on savings and investments to provide income and suddenly saw those accounts drop in half, you may want to consider having additional coverage until those investments come back. Consider the financial ramifications if something were to happen in the next 5 to 10 years…would your family be ok?

Above all, ANY amount of insurance is better than nothing at all. Right now a male age 38 in good health can leverage half a million dollars for 20 years for $35 per month. A male age 54 can leverage $150,000 for 15 years for $43 a month (ladies, your rates will be less).* With insurance rates increasing and an uncertain future for investments, extra protection for your family is needed now more than ever.

* Rates for good health. People with excellent health can qualify for even lower rates.

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