Consumer News And Recalls

Refinancing Your Life Insurance May Save You Money

(CBS4) If a cash crunch has you stressed out month after month, it may be time to re-finance. Not your mortgage; rates are rising there, but a new life insurance policy could save you hundreds of dollars a year.

For years, Byron Turnoff has built his business, but still wants to make sure his family is taken care of if something happens to him. His solution is a term life insurance policy. "It was a comforting thought to know you took care of your family's well being."

Bryon's four year old policy costs him about a thousand dollars a year. But he might be able to get that peace of mind for less. Experts say life insurance rates are dropping, and the trend is expected to continue in 2006.

Steve Weisbart from the Insurance Information Institute forecasts his rates will go down by about three percent.

And that could save you money. Weisbart says, just like refinancing your mortgage when rates drop, you can do the same with life insurance. "You might well pay less money now for the new policy than for the old one. Or, you might be able to buy more life insurance for the same amount of money."

Weisbart says consumers with all types of policies may benefit, but those who bought a term policy at least five to ten years ago have the most to gain. For a half million dollar policy, "A person say, a male 40 year old could pay 300-350 dollars a year. Ten years ago, that would've cost probably 800-1000 dollars," says Weisbart.

Experts say there are several reasons why rates are dropping.

"The most important one is that people are simply living longer. Competition is another force."

If you do refinance, Weisbart says remember: it's a brand new policy so know the conditions. And, make sure your new policy is accepted before you cancel anything. "The worst thing that would happen would be you drop one policy, you go to apply for a new one and they don't offer it to you."

Byron Turnoff says it's a no brainer. "It's not a big investment of time to look. I would definitely take a look if the rates are dropping."

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