Ideas, tips and news about life insurance and the uses of life insurance

The cost of life insurance, specifically term life insurance, has been at historic lows for the past several years. I believe that anyone who has secured term insurance, especially with terms of 20 and 30 years, has gotten a real bargain. Insurance companies have been jockeying around for competitive position and the consumer has been the real winner.

We have seen several companies increasing their premiums and/or removing longer term periods (30 years) from their product lines. Others have removed popular products such as Return of Premium Term life insurance. We’re even seeing some tightening of the permanent life insurance market, with many carriers raising their premiums.

If you need life insurance, I truly recommend that you purchase it soon, as we expect the market to tighten some more, resulting in even higher premiums. We’re not getting a lot of advance notice about increases, either. Your may have received a quote and submitted your application, but the insurance companies are giving very little grace period to the increases.

If you have a group policy at a job that will be phased out soon, look into replacing the group policy as soon as possible. It will probably save you some money in the long run.

I thought long and hard on President’s day of a relevant topic to post, but I could not think of an adequate tie-in. However, all those thoughts of men in white wigs reminded me that, although never president, one of the founding fathers of the U.S. is also responsible for starting the modern-day insurance system in the U.S.

In 1751, according to PBS.org, Benjamin Franklin and his Union Fire Company met with other Philadelphia fire-fighting companies to discuss the formation of a fire insurance company. Out of those discussions, the Philadelphia Contributionship was formed, which was the first successful fire insurance company in the colonies. About seventy Philadelphians initially subscribed to the contributionship.

In May 1752, the board of directors, of which Franklin was a member, decided to form an insurance company. Members agreed to make equal payments to the contributionship, which would be used to pay for losses any member would sustain through fire to his property.

Mr. Franklin also proposed other forms of insurance, including life insurance and annuities, according to PBS.org. In his Silence Dogood letters, he recommended insurance for widows and orphans, much like a current-day pension. Late in life, he also proposed crop insurance, based on the same type of organization as the Philadelphia Contributionship.