Can Your Life Insurance Premiums Increase Next Year?

With so many expenses rising, you may worry about your life insurance premium costs. Learn more about whether or not your premiums can increase.

Review the Type of Policy you Own

Your life insurance policy pays a death benefit that replaces lost income if you die while the policy is in effect. You can purchase several different types of life insurance. Depending on the type you buy, you may have a guaranteed or a renewable premium. Review your policy to determine which type of premium you have.

Consider a Guaranteed Level Premium     

A term life insurance policy with a guaranteed level premium features a fixed premium that does not change for as long as the policy is in effect. You select a term of 10, 15, 20 or 30 years and then pay the same amount every month for the duration of the policy. This option may be right for you if you like predictable premiums and need a policy in place to pay off a mortgage or provide for your children.

Rethink an Annual Renewable Premium

The cost of a term life insurance policy with an annual renewable premium will change each year. The insurance company bases the increase in part on your age. This premium option may be right for you if you want a death benefit to cover a short-term loan or are between jobs. However, avoid an annual renewable premium if you need the policy’s death benefit to cover a long-term financial obligation or want predictable premiums.

Evaluate Whole Life

A whole life insurance policy differs from a term policy in that it pays a death benefit and also earns cash value. The premiums for whole life insurance typically stay the same every month, but they are higher than term life insurance premiums. Evaluate your needs and finances as you choose the right type of policy for you and your family.

Change your Lifestyle

Life insurance premiums depend in part on your gender, age, health, and family’s health history. You’ll spend less money on your life insurance premiums if you maintain a healthy weight, quit smoking and make other healthy lifestyle choices.

Purchase an Additional Policy

Control your life insurance costs when you purchase a new policy. Whether you choose a term or whole life policy, it supplements or replaces your current coverage and provides predictable premiums every year.  

Life insurance premium rates can rise as you age. However, purchase a term or whole life policy with a guaranteed level premium now, and you won’t have to worry about the cost of your policy increasing later. For more information on how you can purchase affordable life insurance that meets your needs and preferences, contact your life insurance agent.
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