Why are Term Life Insurance Rates Plummeting?

Life is full of uncertainties. You never know when you run out of life leaving behind your loved ones in distress. But if you have a Term Life Insurance, it can put all your troubles to rest.

In spite of knowing all this, there are so many people in the US who do not have an insurance coverage. In the last twenty years insurance policies have witnessed a major downfall. According to 2002 data, there was only a 3% rise in the new insurance policies.

What we fail to realize is that a Term Life Insurance can act as a helping hand to the family of the deceased. A person who has bought a Term Life Insurance can die with peace because he knows that he has secured his family's future. The death benefit that the family gets after the demise of the insured can be used to pay off college fees, house mortgage or any other loan.

Figures reveal that in the US, 15% of the husbands and 28% of the wives do not have any kind of life insurance. 22% of the people with dependent children confessed that they will be stuck in a financial turmoil if the prime bread earner dies all of a sudden.

So what is it that deters a person from buying a Term Life Insurance and has led to a steep fall in the new insurance policies? Let's have a look.


  • Life expectancy rate has risen - Due to advancement in technology, all kinds of diseases can now be diagnosed on time. This helps in getting started with the proper treatment on time. In such a scenario, a lot of people do not feel the need to buy a Term Life Insurance.

  • Difference in premium rates - Many people hesitate to procure a Term Life Insurance because every year the premium goes on increasing. As you get older, you are more susceptible to fall sick and die. That is why the premium increases with age. Some people find it difficult to shell out more money for premiums so they either don't buy a Term Life Insurance or stop paying the premiums after sometime.

  • Insufficient funds - It has come to surface that a lot of couples in the US are under insured. Dearth of funds might be the chief cause for inadequate coverage. Statistics reveal that 56% of married persons feel that their present insurance coverage is not enough.

  • Persons with pre-existing conditions are denied insurance - Majority of the insurance companies do not provide insurance protection to people with pre-existing conditions. Therefore, people who suffer from terminal illnesses do not see any point in buying a Term Life Insurance.

  • Stiff competition - Cut-throat competition has given the consumers an added benefit. They can choose their favorite Term Life Insurance at affordable prices. The insurance companies know that the consumers have other options, that is why they have lowered their costs so that they don't lose out on their existing or prospective clientele.

It is important for us to understand the significance of a Term Life Insurance policy and what it can do in times of despair. Though many insurers do not offer coverage to people with pre-existing conditions, insurance companies like Guaranteed Issue Health Insurance have insurance plans that cater to such customers. They will accept you thus making you part of the same crowd as others.