According to Amy Bach, executive director of United Policyholders, a nonprofit organization that provides insurance resources to consumers, the most commonly purchased option is a term life policy with a flat annual premium or semi-annual premium. "The problem with the term life policy," she continues, "is once the term expires, the premiums will go through the roof."
One way to handle this issue is by laddering policies. "That is, buy another policy before the end of the term so that coverage will continue," explains Cornman. "Some policies will let you continue coverage at the end of a term. You would likely pay a higher rate, but it still may be a better option than seeking out a new policy, which may be very costly or difficult to get at an advanced age."
That said, life insurance may still be within reach because "companies are becoming much more efficient at keeping cost ratios down, so it's probably less expensive than it's ever been," according Feldman. "Not that finding the least-expensive price is most important."
Experts stress that whether you buy life insurance online or through an agent, choosing a reputable company with a record of good customer service is a must. "You want to purchase insurance from a company that has a history of paying claims, that has a strong financial rating, and there are fairly easy ways of discovering these things," says Larry P. Ginsburg, an Oakland, Calif.-based certified financial planner and a board member of United Policyholders. Ratings companies like Standard & Poor can offer insights into an insurance company's financial stability.
Consumers should also be wary of insurance products that are overly complicated or over-promise. "One of the biggest areas where consumer advocates have been working is to protect seniors who get sold these new complicated life insurance policies that are really more like investment products," Bach says. "The senior thinks they're going to see some benefit while they're alive, but they're so complicated and there are so many unknowns that it's not a suitable product for that person because of their advanced age." She suggests avoiding shady pitches by asking friends and family for a referral to a reputable insurance agent.
Once you have a life insurance policy in force, it's recommended that you review your policy and beneficiaries every 12 to 18 months to ensure they're up to date. As Feldman points out, if you've gone through a divorce or gotten married and forget to update your beneficiaries, that can lead to problems when you die. "It's really important to make sure that those things are done properly," he stresses. Knowing you have the right life insurance policy and the right beneficiaries offers peace of mind that your loved ones will be taken care of should you pass away.
ACLI's Life Insurance Buying Tips
LIFE's Guide to Life Insurance
Standard & Poor's Insurance Ratings
United Policyholders' How to Do a 'Needs Analysis' Before you Buy Life Insurance