Life Insurance Lowdown

–By Priya Jestin, Staff Writer

After a year of badgering the general public for higher rates, the insurance industry seems to be finally cooling off. And the best thing about this — prices are falling, especially insurance rates.

Life insurance is one area where many consumers have seen a drop in rates. A welcome change but may we ask: Why the fall? Well, the most obvious reason is longevity. People are living longer, which means insurance companies also have longer periods before they have to hand over the insurance benefits.

But a more important reason for the fall in prices is climatic. You have to literally thank the skies for this drop. In comparison to last year’s roar, this year’s hurricane season was just a meow. This means insurance companies did not have to dig deep into their coffers to pay for rebuilding parts of the country. Also, post-Katrina, insurance companies were charging unbelievably high premiums and are on a financial high right now. Most insurance companies are reporting high third-quarter net incomes as compared to last year.

So, have you taken advantage of these changes? Now’s the perfect time to ask your current insurance provider to reconsider your rates. All you need to do is gather quotes from various companies and call up your provider. According to estimates, you stand to gain a reduction of at least $ 100 per year.

It’s that time of the year again: open enrollment time. This means you will be among millions of workers who will be evaluating their health-, home-, life- and disability-insurance options. Choosing the right coverage can be a trying experience and you need to check every aspect before you zero in on the policy that’s best suited to your needs. Columbusdispatch.com reports:

Because insurance is so critical for any financial plan, your best defense is a good offense: becoming better informed. You can do that by reading Lankford’s book, The Insurance Maze: How You Can Save Money on Insurance And Still Get the Coverage You Need ($18.95, Kaplan Publishing).

Read more: It’s a good time of year to learn more about insurance costs, options

HCC Insurance Holdings Inc recently said that it has closed its $140 million purchase of the health insurance unit of Allianz Life Insurance Co. The deal, which was first announced in August, was funded with existing capital resources and without incurring any additional debt. Msn.com reports:

Following the close of the deal, HCC Life Insurance Co. will write more than $750 million in annual premiums, covering more than 15 million lives for health insurance, HCC said.

Read more: HCC Insurance Closes Buy of Allianz Unit

Are you a service member? Chances are you know about the ‘Wounded Warrior Insurance”. But do you know how your military insurance has been enhanced to cover traumatic injury, whether suffered in war or at home even while off duty? Most probably, you don’t. I think the main reason is that the new Traumatic Injury Protection under Servicemembers’ Group Life Insurance is still referred to as the wounded warrior insurance. And also probably because most of the nearly 3,000 recipients to date are wounded warriors who qualified for TSGLI retroactively because of injuries sustained in combat areas.

But The TSGLI goes much beyond wounded warriors and also covers injuries incurred after Nov. 30, 2005. For the record, any service member, active or reserve, who has Service members’ Group Life Insurance and suffers a traumatic injury, can be eligible for the trauma pay. Understanding this is important because members hit by traumatic injuries have to apply to their service for TSGLI payments. Estripes.com reports:

Payments help servicemembers and families handle the extra expense and strain of adjusting to life-altering injuries. Payments range from $25,000 to $100,000, depending on severity of their trauma. Loss of a hand above the wrist, for example, would qualify a member for $50,000.

Read more: ‘Wounded Warrior Insurance’ not limited to war wounds

Could it get any lower — I have a feeling that if this trend continues, very soon, we’ll get life insurance for free (I know that’s like too much wishful thinking but hey, why not). According to the Insurance Information Institute, premiums for individual life insurance are expected to continue a downward trend in 2007 with a drop about 4 percent. Chron.com reports:

The reduced premiums are expected for both term and permanent life insurance, the III said. Term life insurance provides protection for a specific period of time, say 20 years, and pays a benefit if the purchaser dies in that period. Permanent life insurance promises a death benefit as long as the consumer pays the premiums.

Read more: Forecast: Insurance Premiums to Fall

Insurance giant Met Life is probably contemplating moving quite a few of its employees back to Manhattan, five years after it announced it was relocating them to Queens. Met Life is expected to sign a deal to move most of its 1,700 New York employees from Long Island City to Midtown. Ny1.com reports:

In 2001, the city gave the company millions in tax breaks to keep it in the city after it threatened to move to New Jersey. The city had hoped to create an affordable business district in Queens as an alternative to Manhattan.

Read more: Met Life Insurance Company Plans To Move Back To Manhattan

This is a really shocking tale of greed. But it is more a story of how, despite rules and regulations, a determined thief can steal. Recently, Bobbi Jo Fritz, 48, of Pigeon admitted she took nearly $1 million from senior citizens’ life insurance accounts. She pleaded guilty to four felony counts of uttering and publishing checks for more than $20,000 and one count of embezzlement of more than $20,000. So how did she manage to siphon off so much money?

Fritz took the money from the life insurance policies of five Huron County senior citizens over the past 10 years while she was employed at Armbruster Farm Bureau Insurance Agency, authorities said. She changed the victims’ addresses on the accounts, then had checks sent to a post office box she had set up. Mlive.com reports:

Farm Bureau Insurance was unaware of the missing money until August 2005, when a family member of one of the victims noticed changes made to the victim’s life insurance account.

Read more: Woman admits taking money from life insurance policies

A question: How many of you knew that September was designated Life Insurance Awareness Month (LIAM)? Let’s be honest… you didn’t — am I right? Honestly, I feel this is where the problem lies — I mean there are so many uninsured people in the country today that it has become a matter of national importance. And yet, the people planning this awareness month did little to remind us about the fact that THIS was the month! No, I’m not splitting hair. Yes, there is quite a bit of information out there about life insurance and the need to get it. In a country like America where everything is large sized, it is necessary to create hype and a noise to get attention — at least that’s my opinion.

So, fine, we are into the month now and what’s there in store for us? According to recent reports, more than 100 of the nation’s leading insurance companies and industry groups are throwing their support behind an educational campaign. The nonprofit Life and Health Insurance Foundation for Education (LIFE) is coordinating this campaign, which will focus on coverage needs.

LIFE has roped in Olympic gold medallist and sports commentator Scott Hamilton, a cancer survivor whose mother died when he was just a teenager, to be this year’s spokesman. I guess they couldn’t have gotten a better spokesperson than Scott who has lived through some really difficult situations and, hence is perfect to speak about understanding your needs and planning for the eventualities of life.

However, they may need to do more than just creating awareness about the need for life insurance. Getting Americans to take action is a challenge — people have just too many reasons to NOT take life insurance including an unwillingness to think of mortality. I’ll keep you updated about the programs planned for this event and if you do know something, please do pass it on to me.

For decades now, the entire life insurance industry, experts, lay persons and just about everyone else in between has been telling us about the need for life insurance and about the various types of life insurance available. What is missing is an educated viewpoint on life insurance needs in various communities. African-Americans are one community that has yet to understanding the need for life insurance.

There was a time long ago when life insurance in the African-American community was known as burial insurance –African-Americans were allowed only to buy a small policy to bury themselves and this is how it was marketed to them. And the worst part was the open discrimination — more often than not, their Caucasian counterparts, who had the same type of insurance policy, paid less and were offered more coverage. Thankfully, today underwriters of life insurance are not allowed to know the race of individuals applying for insurance. However, the attitudes towards life insurance haven’t changed much since the days of burial insurance. Financial-shopper-network.com reports:

You have to be able to look past this year, $30,000 may take care of your daughter for a couple of years but Social Security will pick not pay the cost of raising a child. Some in the African-American community will spend $500 on a car note, but do not have enough life insurance to feed, clothe, or send your children to college, as well as provide income for their spouse if they die.

Read more: African-Americans and Life Insurance

Sen. Al Lawson, D-Tallahassee, a Big Bend legislator recently asked Gov. Jeb Bush to help head off a huge increase in life insurance premiums for retired state employees. According to Lawson, Bush is said to have agreed to explore options for addressing a pending rate hike from $4.20 a month to $35.79 monthly for retirees carrying $10,000 in coverage. Tallahassee.com reports:

The Department of Management Services this month notified retirees that they would either have to pay the increase, or cut their coverage to only $2,500 if they wanted to keep the $4.20 monthly premium.

Read more: Lawson asks Bush to help state retirees with life insurance premiums