“Life Insurance is going to go up!!!!” I incorrectly predicted…and everyone was mad at me.
Well…not quite.
Back in the late 90’s, a new law led me to believe life insurance rates would increase. And I transformed into obnoxious-life-insurance- salesman mode (picture, perhaps, Ned Ryerson in Groundhog Day). I harassed all my friends and family, insisting they needed to buy life insurance TODAY!
I don’t believe I actually angered anyone…for those who I approached DID need life insurance…but I felt bad as it later appeared I had sold life insurance on false, or at least inaccurate, pretenses.
I vowed that I would never again predict that life insurance rates will increase…I’ll leave that to the “magic” 8-Ball.
In my office is an 8-ball…your average, typical, 8-ball. But Brandon Smith will sometimes entertain me by picking up the 8-ball, asking it a question, vigorously shaking it and then staring at it intently…waiting for a response. After waiting a few seconds, he’ll lift his head and announce the 8-ball’s “answer.” So convincingly in fact, an observer might believe Brandon really can see a message.
Because I’ve vowed to not make life insurance predictions…I’m going to invoke my inner-Brandon…shake the 8-ball and ask it, “8-ball…will life insurance rates go up?”
Some might think this is silly. Not so much because I’m in my 50’s and pretending an 8-ball can make predictions…but rather they might say “well of course they’ll increase…EVERYTHING becomes more expensive over time.”
But this is not necessarily true. Many products over time become less expensive…usually electronics…but life insurance also has become LESS, not more, expensive over time. In fact, by some measurements in 2019 life insurance was the least expensive it had been in 20 years.
So what was the 8-ball’s answer? Well…I’m not going to go all Ned Ryerson on anyone, but the 8-ball DOES think life insurance rates WILL begin increasing.
And when further probed…8-ball said these are the reasons why:
- Insurance carriers fear the unknown. We will not know for years the full impact of Covid on life expectancy…to be safe…they will likely increase rates.
- Longevity in the U.S. has, for the first time in decades, receded the past few years. The reasons for this are many, including increased incidents of heart disease, opioids abuse…and now Covid.
- Turmoil in investments will offer a less-sure footing for insurance carriers and the safest response will be to increase rates.
Again…8-ball is only an 8-ball…but if you are considering life insurance, those are some decent considerations to take action sooner, rather than later. Bing.