Monday, July 05, 1999


New rule may or may not raise term life rates

        If you're thinking of getting term life insurance, some industry actuaries and brokers say this is the year to buy. Long-term price guarantees at current low rates could be heading out the door.

        But others say that there's no reason for alarm and that the push to “buy now” may be a sales gimmick.

        “Right now, what we have is a price war going on among companies. It's the best time in history to buy; rates are low,” said Byron Udell, president of AccuQuote, a life-insurance quote service in Northbrook, Ill.

        Rates for level-premium term policies have fallen dramatically in recent years because of increased competition among carriers and the wide availability of insurance-quote services on the Internet.

        A $500,000 guaranteed term policy for a preferred 40-year-old nonsmoking man cost around $995 annually in 1994; today it's around $425, according to Mr. Udell.

        All that could change when Valuing Life Insurance Model Regulation, also known as Regulation XXX, is adopted by the states.

        The Triple X rule change, approved by the National Association of Insurance Commissioners, requires companies to maintain higher reserves on term policies with premium guarantees longer than five years.

        Some believe the higher-reserve rule will force carriers to raise rates.

        Mr. Udell said a $500,000 policy for a 40-year-old non-smoking man would cost around $420 a year and be guaranteed at that level for three years, then rise to as much as $2,780 after the third year, $4,045 in 10 years and as much as $9,240 in 20 years.

        Many agents have been urging their clients to buy now and lock in a cheap rate or risk such a scenario.

        Some industry experts, though, say the salespeople are using Triple X merely as a marketing ploy — that no one truly knows what will happen.

        James Hunt, life-insurance actuary for the Consumer Federation of America, agreed that the reaction from some in the industry may be overblown.

        However, he suggested those in the market for term insurance buy now anyway, since rates are low.

Mere million may not be considered "wealth'
        What? A mere million dollars? Such a bundle may no longer be enough to qualify its lucky owner as wealthy — even if the person you ask about the cutoff point is the one with the million.

        When Neuberger & Berman, the investment management and mutual fund company, surveyed 204 affluent Americans about their attitudes toward wealth and estate planning, it found that many respondents set a higher bar.

        In the survey, to be released today, 44 percent said the word “wealth” would not apply to a personal stash of less than $1 million to $5 million, and an additional 29 percent set the minimum at $5 million.

        That thinking may not be shared by Americans at the median income level — $37,000 for a household — but the survey concentrated on people who met a fairly common current definition of affluence: annual household income of at least $125,000 and/or assets of $500,000 or more.

Web site gives insight into credit management
        A new Internet site has been launched to offer consumers a comprehensive resource for managing credit and debt.

        The site — — can help you manage credit, examine spending habits, order a credit report ($8 for one; $30 for a more comprehensive one), and contact many money-management and debt-counseling advisers and agencies.

        The site is a joint effort among financial-educational organizations, nonprofit credit-counseling organizations and financial institutions. —Gannett News Service


Fine line on harassment
Dress codes: a casual question
Hole in the Net: auction site taxes
Credit card terms can be costly