Why you may be overpaying for your life insurances

“Sorry, but I’ve already have bought my insurances (x) years ago” or “My parents already bought my insurances when I was young”

I’m sure you’ve heard of it or even said the above phrases before, but do you know that actually, your “old term insurances” or the “whole-life insurances that your parents bought when you were young – that you are now paying” may actually cost you more than the policies available in the market today.

Here the reason why:

For Whole-life insurances that were passed down by your parents

Imagine paying the price of an iPhone for the features of a Nokia phone, that’s essentially what you are doing for the whole-life plans that your parents bought 20-30 years ago

In terms of cost, the reason why its older policies may cost significantly more than newer policies is due to the fact that:

Firstly, the premiums of older whole-life policies are usually payable for a lifetime, whereas modern whole-life policies are payable only for a limited amount of years.

Secondly, the cost per $1,000 insured is in the past may be more expensive as compared to the cost per $1,000 insured today.

As a result, policies today may cost lesser than the policies you bought previously even though the age of entry is higher (disclaimer: depending on your age of entry and market situation!)