Life Insurance Rates Florida FL
Reader’s Question:
I heard from a friend that people are living longer. How will this affect my life insurance rates Florida?
Miguel
Tampa FL
The new actuarial table or the mortality table shows that life expectancy increased. Males can now live up to the age of 74 from 70 while females can live up to 79 instead of 77. The reason behind this is the better lifestyle and improved medical care. This is good news, especially to insurance policyholders.
Insurance companies use the mortality table to set their rates and with the new table, price may decrease.
Premiums that insurance companies charge are used for investment and are paid out as benefits. The longer the person lives, the longer the time they can invest the money. The company will not need to charge you with higher rates. The policy though is locked in according to the old
actuarial or mortality tables. You can check with your agent if you can take advantage of the new rates which is based on the new mortality tables. Note that price cuts may not happen in just a few years because the laws of the state requires the insurance companies to adopt the new
mortality table 5 years after the date of implementation.
The amount to be dropped depends on the type of insurance. Term life insurance, which doesn’t have cash value component and covers only a specific period of time, has the most significant drop. Some industry actuaries think on the other hand that whole-life insurance will have the most price drop.
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