Term life insurance is very different from most other types of insurances.  For example, we're all well too versed on how health insurance rates tend to go up (and up and up and up).  This will probably only continue as the root cause of increasing health care costs hasn't been addressed (hint hint unhealthy living and increased utilization).  Term life doesn't work this way.  When you purchase a term life plan, you can feel pretty confident that the rate will be the same for the duration of the term that you select.  For example, if you buy 10 years of term life at a certain rate, that rate is what you can reasonably expect to pay for all of those 10 years.  If only other products could work this way (I don't know...cable comes to mind).  Let's take a look at the implications of this and how to use it to your advantage.

Once you lock in a rate based on your health, that's it.  Your rate is locked in for the full term you chose.  If your health changes, they can't come back and increase your term life rate based on that.  This is a big part of why the underwriting process is much more involved than other insurance plans and other products for that matter.  The cable guy isn't going to ask you for a blood sample before giving you HBO (desperately grasping for witty True Blood retort).  The life insurance carriers are making a decision for years (if not decades) and they cannot raise the term life rate you are originally quoted so they really need to scrutinize every new application and applicant for potential health issues.  The underwriting process for a term life insurance can take months and the higher the amount of term life, the longer that process.  The fact that they can't raise rates if mistakes are made in the underwriting process drives this thorough process. 

What happens if a life insurance company runs into serious claim exposure that may affect the health of their business?  Usually, the life insurance carrier will just increase the rates on new business to offset bad claims experience on older business but there could potentially be situations where a class of policies (not an individual's term life policy) could be raised.  This is incredibly rare and very unlikely.  Ultimately, that's why we look at the financial health of the carrier.  The rating agencies help us to understand how stable the carrier is and stability means that they have priced their plans well against the potential risk of excessive claims and also, that they have reserves in such a situation.  We look to the financial ratings of the carriers to insure that they keep their word and that our term life insurance rate does not increase before the life of the plan.

Keep in mind that the rates do not increase during the duration of the term but if you need coverage after that term exhausts, the rate will likely increase significantly assuming you can qualify based on health.  Some policies will have riders that allow the policy owner to buy additional term at a certain rate (definitely higher than original) regardless of health or convert their policy into whole life.  It's hard to argue for whole life but if you find yourself needing additional life insurance when an initial policy ends, it's probably best to re-evaluate all your options on the market with your licensed term life insurance agent.