Grab Low-Cost Life Insurance

I plan to buy a term life insurance policy. I know that premiums have been low for the past several years, but I hear that rates are starting to rise. Is now a good time to buy? -- J.K., Portland, Ore.

Yes. Term life insurance rates are starting to creep up after nearly 20 years of steady decline, primarily because of low interest rates on insurers’ investments. Rates for a $500,000, 20-year term policy for a healthy 40-year-old man bottomed out at about $350 a year in 2010, where they have remained ever since, says Byron Udell, of AccuQuote.com.

But while a few insurers still offer those low rates, others have raised term prices over the past six months -- to, say, $415 to $445 a year on a 20-year policy for the same healthy 40-year-old man. Some insurers have made other big changes. For instance, two of the largest term insurers -- Genworth and ING -- stopped selling 30-year term policies, and others are expected to follow suit.

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If you’re healthy and halfway through a 20-year policy, you may be able to lock in a low rate for a new 20-year policy, even though you’re older. But it’s getting tougher to qualify for an insurer’s lowest premiums; you must meet strict health criteria. Each insurer has different standards, so compare rates at www.accuquote.com and www.lifequotes.com.