How to Deal With the Rising Insurance Costs
Most financial experts will advise the young workers to start saving early. If you save early, you’ll have more time, freedom, and flexibility to let your money grow. One way of doing that is through acquiring an insurance to either protect yourself, your family or your properties.
Not only does it cover the fees should something happen to you or your properties, but your money continues to grow and it’ll help you use this fund to shoulder your future costs and expenses, especially when you retire. While the thought of having insurance gives a sense of ease and security for us, you might want to keep monitoring your costs.
Otherwise, you might be carrying the burden of paying for its rising costs. Consult with your financial advisor to help you deal with these increasing costs and how you can avoid it.
For the last three years, some major insurers have decided to increase the premium rates of their customers’ life insurance policies without informing them explicitly. They just carry over the increased costs in their customer’s annual summary billing statements.
To better understand this scenario, the financial experts have laid out an example in the 2nd most popular insurance: the homeowners’ insurance policy. Imagine if your client bought a homeowners insurance policy last year. Your insurer realized the company needs to increase their premium rates to keep up with the demand.
Typically, the insurer needs to send his client a bill with the updated information on the increased price. The client has to pay the updated premium prices to continue his coverage for another year. Now imagine if your insurer decides not to inform you of the increased prices, you would suffer a loss and soon discover you weren’t covered just because your policy expired due to the higher costs.
You’ll end up getting frustrated because you’re paying for an insurance you thought will help you in times of need, only to find out you weren’t covered anymore. This type of SOP is also affecting the consumers who bought non-guaranteed life policies.
The Alarming Trend
This alarming trend prompted the American Bar Association to publish a book entitled The Life Insurance Policy Crisis in 2017. The said book tackled about 45-55% of non-guaranteed life insurance policies that currently exist in the United States.
The Wall Street Journal also published a one-page report cover story on September 30, 2018, featuring the plights of certain individuals who’ve been affected of this increased COI for the first three years, when they have been paying for these non-guaranteed life policies for over 25 years already.
Instead of anticipating their claims, they’re now forced to pay significantly higher premiums to maintain their policies. What’s worse, the insurer has to keep all the premium without paying out their clients a death benefit should they fail to pay the increase according to the report.
How to Protect Your Insurance Costs?
If you haven’t already done so, consult your financial advisor to determine if your individual life insurance policy is sufficiently funded. The same is true for trust-owned policies. If your financial advisor doesn’t have the necessary knowledge to know, it’s important for the both of you to consult with an independent insurance consultant to evaluate your policy’s performance.
While a majority of consumers think life insurance policies only provide death benefits, most executives and business owners use their policies’ living benefits to sustain their deferred compensation and retirement plans. If the internal costs increase, it can reduce their cash value accumulations significantly.
You can also avail of a hybrid life insurance policy with investment tie-up to build your cash fund in addition to the life protection. In this way, your accumulated cash funds from your investment section can help cover for your increased costs according to most financial advisors.
More in Insurance
This Is The Secret To Not Get Tricked By Deferred Credit Cards
The holidays are making its way which is why more and more people are starting to get the best deals not...December 2, 2018
Refinancing Mortgage Application Rates Hit It’s Lowest In Almost Two Decades
Mortgage applications continue to weaken as the rates go up once more. This has been affecting the affordability as well as...December 2, 2018
Amazon Workers Say They’ve Had Enough Of Inhumane Treatment
As one of the biggest companies in the world, Amazon has a name to protect. With thousands of workers working...December 1, 2018
How Should You Request For A Job Reference?
When asking for a reference, it is essential to note that the person whom you ask and the manner in which...December 1, 2018
Here’s What To Do With Your Healthcare Insurance Plan After Divorce
It may begin as something so beautiful and magical but not every marriage ends in happily ever after, unfortunately only a...December 1, 2018
Find Out The Credit Score Requirement For Federal And Private Student Loans
Federal Loans Generally, the necessary credit score before you can get any student loan depends majorly on whether the loan is...November 30, 2018
How To Teach Your Kids Saving And Spending Lessons
Learning Spending And Saving Habits The chief executive officer of RoosterMoney, William Carmichael, said that parents are having more difficulties holding...November 30, 2018
5 Major Signs It’s Time For You To Say Goodbye To Your Job
Young people usually think that having a job when they get older would mean that they will be able to buy...November 29, 2018
Home Owner? Here’s How To Know If Your Fire Insurance Policy Is Sufficient
According to the founder and CEO of Lionshare Partners, Chris Jackson, a lot of insurers have made consumers’ ability to get...November 29, 2018