In a number of blogs and financial sites there have been an ongoing abundance of articles and comments regarding life insurance for people age 50 and over. Unfortunately, a lot of the information and opinions provided are just plain wrong! For example, a major financial portal, in an article entitled “Term or Whole Life” states:

“……… people who need coverage starting in their 60s and beyond may have no alternative but to buy whole life. Most companies simply won’t sell policies to people over about age 65.”

What a bunch of baloney! Right now, I’m looking at term life insurance quotes for a male born January 1, 1938, making him age 71. The quotes I’m seeing show the availability of both 10 year and 15 year guaranteed term insurance from numerous companies.

Not only is life insurance readily available, all underwriting classes (Standard, Preferred and Preferred Plus) are also open to applicants. There is no penalty for being over 50 or 60 or 65.

These quotes are not from marginal or specialized life insurance companies. Even after the ongoing financial markets turmoil, the companies offering these term life insurance products are all rated at least A and A+ by A M Best and offer the most competitive rates available in the marketplace. Don’t you know that Lincoln National, ING, Transamerica , West Coast and other top tier insurers would be shocked to hear that they won’t sell you a policy if you’re “over about age 65?”

There is no penalty for being over age 50 when you are shopping for whole life insurance or term insurance. Don’t be led astray by financial columnists, insurance agents, financial planners or your friends. Do your own research.

Go online and run your own permanent life insurance quotes and term life insurance quotes. Review the underwriting guidelines, company ratings and the wealth of life insurance information available for your consideration. If you need life insurance, do a little digging and find the policy and price that work for you.

When shopping for term life insurance online you will find a wide variety of prices, facts, figures and ratings available. Unfortunately, many sites may also ask for unnecessary personal and contact information!  This page will tell you what you have to do to get your term insurance quotes, and what sorts of information you should get in order to make a meaningful term life insurance comparison?

What kind of basic questions do you have to answer?

The online insurance service will need some basic information to prepare your comparison quotes.

• The quote service will need to know your state of residence to determine available policies.
• They will need to know your date of birth to calculate your insurance age (Some companies use your attained age while others use age nearest birthday.)
• They will need to know your gender for proper rate classification.
• They DO NOT need to know your name, city, street address or your telephone number to provide you with an accurate quote.

What about health questions and Rate Classification ( Super Preferred, Preferred,or Standard)? Every life insurance company determines your rate class based upon their unique underwriting guidelines. At 1stQuote you will need to answer a short series of build, tobacco use, health history and avocation questions so that the approximate rate class can be calculated for each company and used to provide you with the most accurate online quote.

Some firms may have you simply review a general list of health history guidelines and then have you guess your rate classification based upon this generalized information. Unfortunately, this approach has a greater chance of resulting in inaccurate health classification and incorrect rate quotes.

What Information Do You need to see in your term life insurance comparison ?

The more meaningful information that is included, the easier it is to select the insurance company and life insurance policy that will best meet your needs. At a minimum we believe a useful comparison should include:

• You need to see and compare pricing (monthly, quarterly, semiannual, and annual) from a variety of term life insurance companies. In most cases, annual and automatic monthly bank draft premiums will save you money.
• You need to see and compare how long each company guarantees that its rates/premiums and death benefit will remain level .
• You need to see and compare the major financial ratings for each company listed in your comparison. At a minimum you need to see the A. M. Best rating and also Standard & Poors with Moody’s, Fitch and others whenever possible.
• You need to see and compare information regarding the insurance company’s history, assets under management, location, telephone etc.
• You need to see and compare a statement of each company’s basic policy provisions, issue ages, conversion rights, re-entry provisions, maturity dates, extra cost riders and other contractual information.

Armed with this information you can make an informed decision as to which policy best meets your particular needs and circumstances. If you have questions, the quote service should have 800 number help available throughout the day.

Thursday’s New York Times article “Insurance Industry Joins Banking Giants on the Hot Seat” pretty much says it all. “Insurance stocks have plunged more than 30% in the last 5 days with Prudential Financial the big loser on Thursday.”

It’s no longer just the banks. Life Insurance Company asset quality and capital ratios are under the microscope and Prudential Financial, Hartford Financial and MetLife Inc. were the focus on Thursday.

On Friday, Bloomberg reported that MetLife Inc., the biggest U.S. life insurer, said:

“a major” credit-rating firm will conduct a review in the fourth quarter that may have “a material adverse effect” on results and the company’s financial condition.

“The difficulties experienced recently by many financial institutions, including our competitors in the insurance industry,” may prompt ratings companies to “heighten the level of scrutiny” for their reviews, New York-based MetLife said today in a regulatory filing.

Also on Friday, Standard and Poor’s stated:

“We expect to revise the ratings or outlooks on several life insurers in the next few months because of the impact of these challenging macroeconomic conditions.” They went on to say “The ratings agency believes that although short-term pressures are significant, the industry’s long-term fundamental strengths remain intact. Therefore, S&P expects most downgrades to be one to two notches at the most.”

The current financial downdraft is impacting every industrial, service and marketplace sector – but don’t lose your well reasoned perspective. So far as your life insurance program is concerned, please consider the recommendation in our prior post of October 3, 2008:

“What do these potential ratings changes mean if you’re shopping for insurance or currently insured by a company whose ratings are lowered?  The short answer is it depends on how far the ratings fall.  While A++ (AM Best),  Aaa (Moody’s) and  AAA (S&P and Fitch) are the top ratings at present, companies rated as low as A- (AM Best), AA- (S&P and Fitch) and Aa3 (Moody’s) are still considered “Excellent, Very Strong and Secure Very High” by the major rating services.

There’s a new reality when considering life insurance company financial ratings. If the company you’re considering (for a new insurance purchase) is rated A- or AA- or Aa3, or your existing company falls from A+ to A-,  AAA to AA- or Aaa to Aa3, you still have ( in the rating service’s opinion) a top quality, safe and secure life insurance company.”

In the short to intermediate term, the current worldwide economic upheaval will leave few financial sector companies unscathed.  The life insurance industry is all about quality of assets, capital levels and financial ratings. In today’s illiquid economic environment and focus on asset quality and capital ratios, many life insurance company’s financial ratings are bound to change.

Reuters today reported – “Moody’s Investors Service warned on Friday it may downgrade credit ratings on some U.S. life insurers as a financial crisis takes a toll on their investment returns.”

American General Life Insurance Company, operating as a subsidiary of AIG Insurance, had its ratings lowered after a U.S. Government takeover.  AIG now plans to sell the company to raise capital.

This evening, Fitch Ratings place Genworth Financial and its Life Insurance Companies ( Genworth Life & Annuity, Genworth Life Insurance Company of New York, etc.) on a “Ratings Watch Negative – The rating action reflects Fitch’s concerns over declining life insurance capital levels and the potential for additional investment impairments in the second half of 2008.” Ratings may be revised (downward) in the next several weeks. Over the short to intermediate term, we’ll probably see the ratings of any number of other well known Life Insurers trend downward to reflect capital markets stress.

What do these potential ratings changes mean if you’re shopping for insurance or currently insured by a company whose ratings are lowered?  The short answer is it depends on how far the ratings fall.  While A++ (AM Best),  Aaa (Moody’s) and  AAA (S&P and Fitch) are the top ratings at present, companies rated as low as A- (AM Best), AA- (S&P and Fitch) and Aa3 (Moody’s) are still considered “Excellent, Very Strong and Secure Very High” by the major rating services.

There’s a new reality when considering life insurance company financial ratings. If the company you’re considering (for a new insurance purchase) is rated A- or AA- or Aa3, or your existing company falls from A+ to A-,  AAA to AA- or Aaa to Aa3, you still have ( in the rating service’s opinion) a top quality, safe and secure life insurance company.

There’s a new reality when considering life insurance company financial ratings. If the company you’re considering (for a new insurance purchase) is rated A- or AA-, or your existing company falls from A+ to A-, or AAA to AA- you still have ( in the rating service’s opinion) a top quality, safe and secure life insurance company.

It appears that American General Life Insurance Company policyholders may soon have some answers regarding the future of their life insurance policies. Bloomberg.com is reporting that AIG plans to sell their U.S., Japan and European Life Insurance companies to repay their government loans.

This is good news!  American General Life is an excellent company and the financial stability that will come from severing ties with AIG can help them get out of the public relations business and back to providing high quality, innovative life insurance policies and excellent policyholder service.

With recent headlines about Economic Bailouts, bank failures, insurance company rescues, the mortgage meltdown, stock market woes, job losses and the impending recession, any number of financial sites have been recommending a life insurance review and update as a source of possible budgetary savings.

With term life insurance costs having steadily declined over the last decade, reviewing your current life insurance needs and costs is an excellent idea. However, when you think about it, a life insurance review should be undertaken every year no matter what the economic climate.

Life insurance needs change regularly. Your income, assets, liabilities, mortgage, education funding, family size, company benefits, number of dependants, etc. all change over time. Take a few minutes with an income replacement estimator and/or human life value calculator to see where you are today. You may not have enough life insurance. However, you may also discover you are paying for more life insurance than you need or that you will not need coverage nearly as long as you originally estimated.

Term life insurance prices have fallen and today you can, in most cases, buy term life insurance for the exact number of years you will need the coverage. Both these factors can mean real savings.

Take your updated life insurance needs calculations, find a site that offers anonymous term life insurance quotes and spend some time looking at the variety of life insurance companies, policies, costs and funding periods  available for meeting your life insurance needs at the lowest cost available. In making any decision about pricing or coverage please pay special attention to life insurance company financial ratings from A.M. Best, Standard and Poors, Moody’s and Fitch Ratings.

Kiplinger.com has an excellent article entitled “Don’t Rush To Ditch Your AIG Policy.” This is an objective, even handed summmary regarding the safety of your policy. It rightly cautions against predatory agents seeking to replace your policy and discusses a variety of issues worth considering as regards your existing AIG policy.

In looking at term insurance rates online, we’ve begun to see some very low rates for life insurance buyers over age 50 and 60.  Anxious to offer the lower rates to our customers, we inquired about quoting these rates on our site. Not surprisingly, these extremely low rates come come with some additional application and underwriting requirements.

One company, a very large mutual company with very good financial ratings, requires that each applicant undergo a recorded (and most likely detailed)  telephone interview with a company representative. Another company  requires that older applicants seeking these low rates provide (in addition to normal underwriting requirements and medical records), a detailed letter from their personal physician.

We decided to pass on both these products.  Over the past 13 years online I’ve discovered that most of 1stQuote.com’s shoppers value their privacy and simply want to get their life insurance as soon as possible. They would prefer to buy their life insurance online with as little conversation and as few extra requirements as possible.

Additionally, it also makes me wonder if these additional requirements are needed because the lower prices being quoted are the result of underwriting standards that are more rigorous, require more information and are perhaps, not as easily met. If that’s the case,  the competitors prices that initially seemed to be more expensive may turn out to be a good choice after all.

In most cases the answer is YES! Let’s say that 4 years ago you purchased a $1,500,000 term life insurance policy with a 20 year guaranteed level premium term period. In reviewing your assets and liabilities today, you realize that you no longer need the full $1,500,000 of coverage to meet your original income replacement, education and liability needs.

Calculating that you only need to maintain $800,000 of life insurance coverage, what do you do? Calculate the cost of reducing the face amount of your existing policy. In the example above, the existing policy costs $1,630 per year (including a $60.00 annual policy fee).

To calculate your current cost per $1,000 of coverage Take the existing outlay of $1,630 and subtract the $60 policy fee for a actual insurance cost of $1,570.00 per year. Then divide the $1,570 by 1,500 (number of $1000’s of insurance) and you get an annual cost per $1,000 of insurance of $1.05.

That means that reducing your $1,500,000 to $800,000 would result in a new cost of $900.00 per year. This is calculated by taking the cost per $1,000 – $1.05 then multiplying it by 800 ($800,000) and then adding the annual policy fee of $60.00 ($1.05 X 800 = $840 + $60 = $900.)

If this revised number works for you, you’ll need to complete and sign a policy change form from your life insurance company – no medical evidence is needed. Once the company processes your change they will notify you of the change and advise you of the effective date of the new coverage amount and reduced premium.

However, based on the dramatic decline in term life insurance rates over the past decade, and assuming your health status has not changed for the worst -before reducing your existing policy go online and get some current term life insurance quotes. Compare prices and find your best buy for the amount of life insurance you need.

There is one caveat: Most term life insurance policies are priced based a minimum policy face amount (i.e. 100,000, 250,000, 1,000,000 etc.) Generally, you will not be allowed to reduce your coverage amount below your particular policy’s minimum face amount.

No one likes taking a medical exam for life insurance. However, taking a few simple steps before the examiner arrives could make a real difference in your ultimate rate classification and what you’ll pay for your new coverage.

When you schedule your exam, arrange to have the examiner arrive as early as possible in the morning. You’ll get your very best lab results after fasting at least 8 hours, and if possible 12 hours before your exam.

Having your exam first thing in the morning means you won’t be tempted to eat or drink and also that you’ll probably be more rested and relaxed after a good night’s sleep.

If possible, you should also consider taking the following simple steps in getting ready for your life insurance medical exam:

• Do not engage in strenuous exercise for 24 hours prior to your exam.
• Avoid alcoholic beverages for 24 hours prior to your exam
• Get a good night’s rest before your exam.
• Avoid coffee, soda, tea or other products with caffiene for several hours before your exam.
• Avoid smoking or chewing tobacco for at least one hour prior to your scheduled appointment.
• Avoid nasal decongestants for several hours prior to your exam.
• Drink a glass of water and hour or so before the exam to facilitate providing a urine specimen.

For more information and details about your life insurance medical exam please see 1stQuote.com’s summary What type of Medical Exam is Required to Buy Life Insurance.