Wednesday, Nov. 11, 1992 - North Shore News - 44 a US BUSINESS Get best value for life insurance premiums Michael DOLLARS AND SENSE HAVE YOU owned a per- sonal term insurance policy on your life for a few years? Are you in sound health? If you can answer ‘tyes’? to both questions, you could be on your way to saving hundreds — even thousands — of dollars a year. The cheapest pay-as-you-go life insurance is normally an an- nual renewable term policy. Each year, as you get older and your risk of dying increases, the cost of your insurance premium also in- creases, However, this increasing annual tate is based on, among other things, your health at the time you apply for the policy. And so if you can show your health is as good at age 51 as it was at age 46, for example, you can make a fresh start — and + lower your insurance premiums in the bargain. Many insurance companies will allow you this sort of re-entry. You take another medical, up- date the application information, perhaps pay a fee and if you can get a clean bill of health, your premium rate drops. You could also apply to another company, and escape paying the re-entry fee. But then you must deal with a two-year “‘suicide and incontestability’’ clause. In other words, you won’t be covered if you commit suicide in the first two years, and the in- Doctor speaks to university formation you provided on the application can be challenged in that period. (Note: Whenever you replace an existing policy, always keep it in force until you can confirm the new policy is providing the coverage for which you applied.) Most insurance policies contain information about any re-entry options they offer. And ideally, your life insurance agent should remind you when you first qualify for re-entry, typically five years after you take out the policy. Here’s an example: When | was 46, 1 took out a term life in- surance policy from American Life Insurance Co. (Alico). At age 51, my annual premium was $2,271. Alico allowed ine to apply for re-entry — by paying a $400 fee ~~ and if | qualified, would lower to a thing my premium to $1,213. The following year, premium would be $1,586 compared with $2,668 if | didn't apply to re-enter (ar did apply and tailed). So 1 could save, after the $400 fee, $658 in the first’ year, then $1,079 the second year. The sav- ings in each of the next three years ranged from about $800 to about $1,000. However, Alico would not guarantee the premium amounts beyond the fifth year. For chat reason -- and fo @ lesser degree because | resented having to pay the $406 re-entry fee, which Alico refused to waive. | applied to Metropolitan Life for the same coverage. I passed ike medical and ended up with a first year premium of $1,540. My future savings will my range from about $700 10 S900 a year, And Met Life does guaran- tee the future premiums. [ followed my agent’s recom. mendation of Met Life over some smaller companies which offered slightly lower rates. Over the next five years, £ will save $3,956. If f invest my average annual savings so they compound annually at 7%, (Il have almost $5,000. That's not a bad return for spending a couple of hours with tny fife insurance agent to review my options and then the doctor to go through the medical. You should talk to your agent to see if you still have the ap- Propriate type and amount of in- surance coverage — and are pay- ing the most competitive (not nec- essarily the cheapest) premium. There isn’t space here to discuss Hm Wrap up a 386SX/25 clone for Christmas, with colour monitor! until March! 999°"" An incredibly low price on the 386SX/25 computer with colour monitor. And it’s just in time for With an 80386SX/25 Christmas! pay “AS SEEN ON TV! Regula 500.00 BZ G00 Piuareceve an SHQMG the pros and cons of annual renewal term insurance — versus five- or 10-year renewable term — or term versus whole/universal life insurance. Those are subjects for another column, Don't took for one right type of policy for everybody: you should have the kind and amount of coverage that matches your par- ticular needs ~ recognizing those needs change over the years, - Copyright 1992 Mike Grenby is a= North Shore-based columnist’ and in- dependent financial adviser who works with individuals; he will answer your questions as space aliows — write to him c/o The North Shore News, 1139 Lonsdale Ave., North Vancouver V7M 2H4. oF Here's an extra-special giit you'll 4 want in your stocking! Has 48-number memory with al- phanumeric entry and auto-dial. Lightweight too! 17-1060 microprocessor, ! MB RAM 106 MB hard drive, MS DOS 5.0 and four ex- pansion slots. 251-4000/25-8847. SPECIAL PURCHASE G95 AdLib bundle. 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