Term life insurance prices rising amid low interest rates

  @Money May 6, 2013: 4:45 PM ET
life insurance

Premiums for term life insurance can vary widely. Search online for comparison pricing.

(Money Magazine)

Term life insurance is getting costlier -- and a bit harder to find.

Following a decade in which prices fell to all-time lows, premiums for new term policies last year rose an average of 3%, says online agency IntelliQuote, which forecasts more increases this year.

The culprit? Sickly yields on bonds, in which insurers invest most of customers' premiums.

Hit hardest are policies longer than the standard 20-year term; top firms Genworth and ING have stopped selling 30-year term, and rates are up about 5% among remaining carriers, says Byron Udell of term life agency AccuQuote.

Related: Strategies for buying life insurance

Despite the general increase, premiums can vary widely. To nab a low-priced policy, start your search online with either IntelliQuote or AccuQuote.

How to choose a life insurance policy

Stick with insurers rated A or better for financial strength by A.M. Best. And should you want coverage beyond your guaranteed term, screen for policies giving you until age 60 to convert to permanent insurance without a physical -- a big plus if health changes make you uninsurable. To top of page

Highs and lows
Prices for term insurance range widely.
Annual premium for a $500,000 policy for 40-year-old healthy male
Low $355
Median 415
High 565
Note: Based on March 2013 quotes for a 20-year level term policy from 11 insurers with an A.M. Best rating of A or better. Source: AccuQuote
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Overnight Avg Rate Latest Change Last Week
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15 yr fixed3.30%3.33%
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15 yr refi3.35%3.31%
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