Help! Why Have My Life Insurance Premiums Increased?

Life insurance is usually pretty inexpensive, especially if you buy it when you are younger and healthier. It’s also a worthwhile expense: having a policy will provide a financial safety net for your family. And, in general, you will know exactly how much you need to budget for, since most life insurance policies will remain the same price for the life of the policy. With that being said, though, the premiums of some policies will increase with time, which can come as a big surprise. If you’ve been surprised like this, or if you want to avoid being surprised like this, read on to find out why your life insurance premiums might go up. 

illustration of a man with his hand on his head holding a long bill
Your premiums can increase for multiple reasons. This is increasingly true for certain types of policies.

Reasons Your Premiums Could Increase

When you purchase a life insurance policy, your premiums are usually set based on a variety of factors, including your health, age, lifestyle, and more. Most term and permanent life insurance policies have level premiums, which means the payments stay the same throughout the life of the policy. But there are situations in which your premiums can go up over time. 

A few  reasons this can happen include:

  • Your policy doesn’t have level premiums– Some policies, like increasing term life insurance policies, have benefits that increase over time – with these types of policies,  premium rates increase over time, as well. Universal life insurance also has premiums that can go up or down over time.
  • You have decided to convert your policy– If you have a term life insurance policy that is ending and you have decided to convert it to a permanent life insurance policy, you can expect increased premiums rates. You are now older than you were when you purchased the policy, and your health has probably changed, which can affect your premium rates. 
  • You’ve renewed your policy– The same is true if your term policy is coming to an end and you choose to renew the policy: your annual premiums will change based on your current age and health. 

What To Do

If your life insurance premiums do go up, you should contact your insurance company so you can check if there has been an error, and so they can explain why your rates went up. If you’re unhappy with the rate increase, consider other options, including looking for an affordable new policy. There are many kinds of life insurance policies out there to choose from that offer different benefits and premiums rates. shopping illustration with a site and phone next to a hand

The best way to get an accurate quote in the first place, and not be surprised by your actual premium rates, is to provide as much information as possible when comparing policies from different life insurance companies. There are many different kinds of life insurance policies to choose from, including whole life insurance, term life insurance, and final expense insurance, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there! 

We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Don’t Just Let Your Policy Renew, Review It First!

More than likely, you have a bunch of contracts that you allow to renew each year, like your cell phone bill, car insurance, internet, etc. and you don’t even think twice about it. Sometimes it’s just easier to allow things to renew without reviewing them, or maybe you just simply forget about reviewing all of these contracts before they renew. This might be especially true for your life insurance policy: odds are you’ve probably only reviewed it once or twice within the first year or two of having it. But as your life changes, there may be times when your financial needs change, so it is recommended that you review your life insurance policy on an annual or biannual basis to see if any of the following changes are going to impact your policy in any way.

Administrative Changes You Might Need To Make

Take a look at your life insurance policy and check if there are any administrative changes that need to be made to it, such as:

moving boxes on a dolley
Make sure that your address is up to date on your life insurance policy before it renews.

Address or contact information changes

Have you recently moved, or have you changed your phone number or email address? It’s important to make sure that all of that information is up-to-date, so your life insurance company has a way to contact you in case there’s any change in your policy, and so that you receive your bill without any issues. If you forget to make these changes and a bill goes to your old address or you get notifications on your old cell phone number, you risk your life insurance policy lapsing.

Bank account changes

If you are like most people,  you pay your bills on autopay linked to your bank account. If you forget to update this information, your premiums will not get paid, and your policy will lapse.

Change of beneficiary

When you first purchase your life insurance policy, you will have to choose a beneficiary to receive your death benefit in the event of your passing. Sometimes things change: for example, if you and your spouse get divorced, you will want to change your life insurance beneficiary to your children or someone else, to ensure that the proper person receives your death benefit. 

Policy Changes You Might Need To Make

When it comes to your policy, you might decide at some point that you need more coverage or less coverage. The life changes that could trigger a change include:

Change in income

Whether you have an increase in your income or a decrease in your income, it is important to take a look at your life insurance policy and make sure that it is still affordable, works for you, and will provide enough coverage for your family. If you do get a raise in your income, your expenses will likely go up as well, so you’ll need to make sure that your coverage will meet these added expenses when you pass.

Having childrenblack and white photo of a pregnant woman's belly with a child's head on it while smiling

If you grow your family,  you will have more financial responsibilities and should consider increasing your coverage to provide financial stability for your child as they grow, especially if you want to help with college when they are older. 

Health improvements 

If you bought a life insurance policy when your health was not at its greatest, your rates could be high because of your health conditions. But if your health gets better over time, you can save money on your monthly premiums by providing proof of these improvements. For example, if you were a smoker when you first bought your policy, but later quit smoking, and keep it up for 6 months to a year, you can provide this information to your life insurance company and start saving money.

Your health is going downhill

On the other hand, if your health takes a turn for the worse, you should also consider reviewing your life insurance policy. Declining health will not raise your life insurance policy rates, because once you purchase a policy, your rates are locked in. But if your health begins to deteriorate, you might want to add riders onto your policy, such as a terminal illness rider, or you might want to increase your death benefit coverage. 

Reviewing your life insurance policy before it renews automatically can help you save money and ensure that your family is properly covered in the event that you are no longer around. Once you review your policy, and you come to the conclusion that you need more coverage, or would like to convert from a term life insurance policy to a permanent life insurance policy, it is important to begin researching plans to find the right one for you. 

The best way to understand how life insurance works, and find the right policy for you and your specific needs, is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.