Did you know that it is possible to give retroactive effect to an application for life insurance to fit a younger age? Most life insurance companies use what they call "age insurance" in the calculation of the initial monthly and annual premium. You get one year more than six months before his actual birthday.
Each year it is expected to buy insurance, the premium rises slightly. But if you can set a slightly lower rate for more than 20 years, which would save money over time. Once your policy is issued, the rate for life or the duration of their term is assured. If you are over 50 years of age, the monthly savings are even greater as costs rise faster for the elderly.
To illustrate this, let's look at an example:
I have a client who is an old woman of 33 years. His birthday is September 1, 1977. We hope your health index the "preferred" for a plan within twenty years $ 1,000,000. My estimate is that the premium will be $ 720 / year or $ 62 / month.
But when illustration insurance runs the June 1, 2011 (three months before his actual 34th birthday), the software says she is 34 years old. That's because according to the company, its "age insurance" rose six months before his actual chronological birthday. The premium for a 34-year-old, which in this case is $ 780 / year or $ 67 / month - an increase of $ 60 / year or $ 5 / month.
We can roll back the paper application (making a note in the appropriate section) and lock in your insurance age of 33 throughout the duration of the term. That will save $ 1,200 over the life of the policy.
But there is a cost for using this technique: You have to pay all monthly premiums in advance back to the date of change of age. In this case, if we write the application on June 1, 2011, we have the feedback from her for three months to fit his age insurance 33. A premium back of $ 186 ($ 62 x 3) is required the time of application or at delivery. Basically, you are paying $ 186 to save $ 1,200. (Month at $ 5 /) It will take about 37 months to break even using this technique.
This technique works best with term insurance plans longer life, and especially policies whole life insurance. With a whole life plan, the savings would be $ 34 / month ($ 822 vs $ 856) and the policy would be eligible for dividends three months earlier.
(C) 2012 Prism Innovations, Inc. All rights reserved.
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