Learn more about the economic impact on the insurance industry and how it can affect fluctuations in both term and whole life insurance policies below. You'll also discover how to find affordable coverage that suits your needs and budget quickly.
Insurance providers don't use a one-size-fits-all approach when assigning premiums. Instead, the amount you'll pay is based on various factors, including your:
In short, based on your individual profile, you could end up paying higher or lower premiums than someone else for the same type of policy and coverage amount.
Term life insurance protects you for a set amount of time. If you pass away while the policy is active, your beneficiaries will receive the total amount of the death benefit. But if you outlive the coverage period, you'll need to renew your policy or purchase a new one.
The rates for term life insurance policies aren't impacted by economic expansion and contraction. The reason for this is that insurance providers incur minimal risks with these policies since they're only active for a specific number of years. Plus, these policies don't accumulate a cash value, and there's no guarantee that a death benefit will be paid out.
Unlike term life coverage, whole or permanent life policies accumulate a cash value that you can withdraw or borrow against. This type of policy also provides coverage for your entire life, assuming you keep up with your premium payments.
You might experience higher premiums on a new policy with a guaranteed cash value during a period of economic instability. Insurance companies assess life insurance interest rates annually based on the prior year's performance to hedge against market fluctuations. So, a recession or downturn accompanied by lower interest rates could result in higher premiums to offset losses.
If you have an indexed universal life policy, the stock market index determines the rate of return. Indexed universal life policies have a guaranteed floor, so a downturn doesn't mean you'll lose the entire cash value of your policy. However, your earnings may be minimized.
Are you torn between a whole life or term life policy? Take time to learn more about online life insurance. That will help you make an informed decision when you're ready to purchase coverage. Term life insurance could be a great option if you want to buy a policy but worry you can't afford the premiums.
Ethos offers affordable term and whole life policies. Here's a quick snapshot of each:
Get a quote in minutes with Ethos. No medical exam is required—simply answer a few health-related questions online and explore your options.
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