Insurance Quotes & Advice

As you grow older, the cost of insurance, especially for life and health can grow increasingly burdensome once you pass the age of 50.  Life insurance can be planned for more easily than for health insurance but even it can have it’s own problems.

For those that choose the term life option when they are younger as opposed to whole life, when your initial policy expires, the cost to renew can be prohibitive.  It may make more sense to switch to whole life at this point rather than taking out another term life policy.  One would also expect to be more financially secure the older you get so that you may not need as high a principal value for your policy.

Health insurance can be a large problem for Americans between the ages 50 and 65 years before you become eligible for Medicare.  Companies are also now able to reduce or eliminate some healthcare benefits for employees once they become eligible for Medicare so even after age 65 it’s no walk in the park.

After you pass the age of 50 and you are between jobs, it is imperative that you make the full use of your Cobra options because once you go 63 days without renewing your policy, insurance companies can legally turn you down or refuse to cover your pre-existing conditions.

Make sure also to use any tax related benefits that are open to you.  It may make more sense to switch to a high deductible policy and fund a Health Savings Account which can save you up to 30% for what you put into it.  You are also able to deduct all medical costs that exceed 7.5% of your annual gross income.

The fact of the matter is, you will more than likely have to make some sort of sacrifice in order to keep costs down.

With the exception of a few high profile names, the insurance industry has weathered the sub prime collapse reasonably well as opposed to other segments of the financial sector.  However, profits for the fourth quarter were down significantly for the industry as a whole and many analysts expect that trend to continue for the next couple of years.

Underwriting profits have been trending downward for years since the high rates after Hurricane Katrina started to come fall.  With the lack of a major insured catastrophe in the last few years, price competition is expected to heat up which will be to the benefit of most consumers.  Rates are expected to fall for all segments of the insurance industry with the notable exception of health insurance which unfortunately is still expected to outpace inflation.

Investment income, which has made up the bulk of the industry’s profit has taken a big hit in recent months.  Increased volatility in the stock market as well as disruptions in the bond market have both been to blame.  It will become increasingly difficult to maintain the level of investment income of recent years with the economy in the state it’s currently in.

However, the financial strength of the industry is not in doubt.  Large capital reserves have been built up since Katrina and the claims paying ability of the industry is as strong as it’s ever been.

If your policy goes up for some inexplicable reason it may be your credit score to blame.  The use of credit ratings to calculate premiums has been a sore point of contention between insurance carriers and their customers for a few years now.

In the auto and property insurance industries especially, some companies have determined that there is a statistical correlation between a bad credit score and a higher frequency of claims.  While on the surface it may seem unfair, people need to accept the reality of the situation because most states allow it’s use and the courts have ruled in favor of the carriers when litigation over the subject has arisen.

There are a few things everyone can do to help themselves.  It is always important to check your credit report. The three main credit reporting agencies all offer you one free report annually.

Discrepancies may show up from time to time that you may not even be aware of.  Also, be sure to visit our debt management section from time to time for important tips on keeping your credit score high and for ways to rehabilitate it, if your score is not so good.

Shop around, different companies have different methods of calculating premiums. So, even if you do have bad credit, another company may give less weight to your credit score than your current carrier.

On the bright side a good credit rating supposedly helps lower your premiums, at least that’s what they claim.