Welcome to the "Nonrenewable", "Nonconvertible" Cheap Term Era

Is the golden age of "cheap term insurance" over?  Sure looks like it's terminally ill.

Thanks to sustained low interest rates and onerous reserving requirements carriers are reeling. 

"But wait", you say, "rates have not gone up"...and to a certain extent you are right.  The actual term rates have not shot up, but there are big time "gotchas" that are in play with more and more carriers.

First, let's look at the phenomena of the inferior conversion products.  This is not new.  For the past few years, carriers have been slowly limiting the products a client can convert to...often the schnazzy new business product is verboten.  Rather, a more expensive product with less features is what is offered. Often is much more expensive...to the point of not being viable for a long duration insurance need. 

Second, while the level term period rates have been relatively stable, the price once the product goes through the level term period - the annually increasing rates ARE THROUGH THE ROOF.  It's not unusual nowadays for the rates to increase to a most unaffordable premium rate. 

Term insurance has become just that.  Insurance for a term of a client's life only.  Where once is might have been a "starter insurance plan", that is not the case now with many carriers - and I fear the trend will continue. 

Now more than ever, I think a client must consider some element of permanent insurance as part of their insurance plan.  One thing is for certain - term insurance is not as flexible as it once was.  Careful observation of a client's position and needs are of utmost importance lest he be painted into a corner and cannot afford the insurance when he, his family or his business need it most.