So how does the mortgage crisis affect your insurance rates?

by Michael on August 6, 2008

in Disability insurance,Insurance Newswatch,life insurance

Just a small article to explain how this works. My comments have to do with long term disability insurance.

Although this is not a hard and fast rule, it works something like this …

For every 1% drop in interest rates, insurance may go up by about 4%. Why is this?

Long Term Disability Insurance is to insure against long term issues. Some of the money that is used to pay these claims comes, not from premiums, but from interest earned on premiums. Therefore, if interest rates go down, in order to pay these claims, it’s necessary to raise premiums on new business.

Just another small example of why it’s always a good idea to purchase what a person can afford to purchase, and lock in premiums today.

Have you considered insuring your income against the risk of accidents or illness?

Whether you need group LTD for your employer group, or personal disability income insurance, give me a call or email me and I’ll let you know what is available for you.

Michael P Myers    209-390-1163

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