How’s your coverage?

Life is getting cheaper.

Aging populations, the Internet and a number of other factors in recent years have forced down the cost of term life insurance.

Yet many Americans are still holding on to more expensive policies bought years ago or simply haven’t insured themselves highly enough. Experts say the two-to-three times salary that many employers offer staff isn’t enough to leave dependents, yet not enough people complement this coverage with other policies.

And yet it is cheaper than ever to do this.

Take Albert Perez, a lawyer living in Fort Worth, Texas: “I thought they would come back with what I was paying. I just did it as a long shot.”

While the cost of health insurance for him and his wife has climbed to nearly $1,800 a month, the premiums for his term life insurance have dropped. Even though Perez is now 61, six years older than when he purchased his last term life policy, his new rate will be $550 for the same 10-year, $750,000 coverage — $300 a month less than what he was paying.

“It has been mind-boggling,” said Byron Udell, founder and chief executive of www.Accuquote.com, a Web firm that contracts with more than 40 insurance companies. “I don’t know how much cheaper it can get.”

Udell cites this example: In 1990, a healthy 40-year-old man would have paid $1,405 a year for $500,000 in insurance for a 20-year period. That same policy now costs less than $400.

If that person is healthy, he could save money by replacing the older insurance with a new 10-year term policy for $525 a year or a new 20-year term policy for about $1,000 a year. The savings typically are even higher for policies for $1 million or $2 million in coverage.

Mike Kalen, executive vice president of Hartford Financial Services Group Inc.’s individual life division, attributed the decline to a number of factors, including longer life expectancies and improved technology. Insurance companies, he said, have gotten more efficient at collecting information and assessing potential candidates.

The Internet also has made the business more competitive, Udell said.

“With information so easily available, if a company is not competitive, it doesn’t sell,” he said.

Yet many consumers either don’t have life insurance or don’t have enough. About 24 million U.S. households (more than one-fifth) have no life insurance, according to Limra International, a Windsor, Conn., association that provides research and other services to financial-services companies. Among those with coverage, 40 percent believe they don’t have enough.

Consumers cite a number of reasons for not making the purchase, including procrastination, confusion and concerns about cost. About 20 percent say it is unpleasant to think about dying.

“I think it’s something people don’t like to think about,” Udell said. “Historically, insurance is a product that is sold.”

People often mistakenly think the insurance they get at the office is enough. Employers that offer life insurance as a benefit typically provide coverage that would replace one- or one-and-a-half-times annual salary.

That is far too little, according to those in the insurance industry. While the amount and length of coverage varies from individual to individual, consumers should consider purchasing enough to replace five- to 20-times the amount of salary, especially if the household has a lot of debt and young children, said Mark Hug, vice president and chief marketing officer at Prudential Insurance Company, a unit of Prudential Financial Inc.

Families, he said, often overlook the economic value of the stay-at-home parent when considering how much coverage they need. That person may not earn a salary, but a death could be financially and emotionally devastating.

The most common and affordable life insurance is a term policy. As its name implies, it is temporary. Most companies offer coverage for 10, 20 or 30 years. The only way to collect is if the holder dies during the term.

In contrast, whole-life insurance is a permanent product, which has a guaranteed cash value, but is more expensive and frequently used for estate planning.

One relatively new product is the return of premium term insurance, or ROP. It generally has lower costs than whole life and guarantees the refund of the premiums at the end of the term, assuming the policy owner hasn’t died.

Peggy and Sam Lau, who live northeast of San Jose, Calif., are typical of many first-time insurance buyers. They have two young children and have been intending to get coverage for a few years.

“He got busy at work, and we never got around to it,” said Peggy, 33, a stay-at-home mom.

But when Sam’s 71-year-old father died suddenly, it was a wake-up call. Fortunately, he recently had renewed his life-insurance policy before he passed away.

The Laus did their initial shopping on the Internet. They eventually used Accuquote to get a $750,000 policy for Sam and a $500,000 policy for Peggy for less than $55 a month.

“I think as soon as I sent it off, I was relieved,” she said.