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[quote=Anonymous][quote=Anonymous]As a naive, cautious 30-year-old I got talked into 10-year term life insurance for me and my same-age husband. His premium was $980 per year. The agent told us in writing that it would “start increasing” this year, which I took to mean some sort of gradual up-slope. Just found out the new premium is $3,600!

Thankfully we have no new health conditions and are prepared to apply for new policies as 40-year-olds.

But is this type of jump par for the course and common knowledge? We feel like idiots for assuming they would want to keep our business and increase it more modestly. I am sure I verbally asked “what type of increase can we expect”? ten years ago and this was never insinuated but of course nothing was promised…[/quote]

Life insurance agent here. Yes, this is totally normal. My guess is your agent also offered you a 20- or 30-year term and you chose the 10-year instead because of the lower price. There’s no reason your agent would not have at least given you these options — not only would the agent have earned a larger commission since the policy would’ve cost you more, but as you now see, it is also in your best interest to do a longer term.  (Actually, it is insane to only do a 10-year term at age 30. You’re just lucky you are still in good health so that the only fallout is that you have to go through the inconvenience of reapplying. But imagine if you had developed some major medical condition which made you now uninsurable or made the rate substantially higher.)

Here’s a tip: on your new policy, get the longest term you think there’s any chance that you will need. For example, it will be more expensive to get a 25-year term than a 20-year term, but you can always cancel it early if you don’t need it and it gives you a lot more flexibility. It’s like taking out a 30-year mortgage instead of a 15-year.  Even if you plan to pay the mortgage back in less than 30 years, it gives you the increased flexibility to keep your monthly bills low and only make additional principal payments when it’s convenient for you.

Otherwise, you end up like some of my best customers, who thought they wouldn’t need insurance beyond age 60. Life didn’t turn out as they had planned, and now they need to take out a new 10-year term at age 60 — and on top of that, now their rate class is higher because they also have a history of cancer, etc.  Fat commissions for me; unfortunate situation for them.[/quote]

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