February 10, 2017

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A LifeTime of Coverage

February 10, 2017 by Dan Kampani No Comments

Sometime back a potential client in average health called me from New Jersey. At 41, he had suffered through a history of high blood pressure and depression for quite a while. A non-smoker and otherwise in good shape, this family law attorney got married a couple of years back and now his wife was pregnant with their first child.

He wanted a guaranteed lifetime of life insurance coverage of $1,000,000 on himself. At the same time, he did not want to pay premiums for the rest of his life. I offered him had a 30-year term, a 30-year return of premium term, a universal life insurance plans without cash values with the last premium to be paid at age 65; and participating whole life insurance with cash values (pay only till 65).

Of course, I looked into multiple insurance carriers to find him the best options. Here is what I found. His 30-year term was for $228 monthly; return of premium term for $446; universal life plan (pay only till 65) for $850 monthly; and whole life for $1,786 monthly. A 30-year term for $228 monthly premium made the most sense to him at this point in life.

But his heart was set on a policy with a lifetime of coverage. He also wanted to come back in a few years when his practice would begin to do better and convert the term policy into a permanent life insurance plan. This is where it becomes tricky. Since there are always multiple insurance carriers fighting for your business, it is not always a good idea to go with the one that offers the lowest premium. In his case, for a few dollars more, I found him an A+ rated solid carrier with excellent options to convert to a whole life or guaranteed universal life in future.

The lowest premium term life insurance policy may not be the best option for you.

A Quick Comparison of Life Insurance Premiums

MALE \| AGE: 35 \| RISK CLASS: SUPER PREFERRED \| NON-SMOKER
	Real-time Life Insurance Rates Face amount: $1000,000
10 Years Term (convertible to guaranteed universal and whole life)	$19 monthly
20 Years Term (convertible to guaranteed universal and whole life)	$34 monthly
30 Years Term (convertible)	$64 monthly
30 years Refund of Premium Term	$132 monthly
Universal Life (pay only till 65) (Lifetime of coverage without cash values)	$583 monthly
Whole Life (pay only till 65) (Lifetime of coverage with cash values)	$1,446 monthly
Please note: The rates quoted are estimates and are subject to underwriting by the insurance carrier. Rates do not include optional riders. For a no-obligation consultation, call us at 1.866.526.7264.

In my experience, most people who buy a term life insurance policy do it because they could not afford the higher premium of a permanent policy. Since our needs and affordability change over time, it is always a good idea to talk to your insurance advisor before accepting a life insurance carrier. You want to make sure that if you cannot purchase a lifetime of coverage today, you do have reasonable options to pick one in future.

Conclusion

Since most of us do not live beyond the age of 120, a permanent life insurance policy guarantees a financial cushion or in many cases a financial legacy for your loved ones. If purchased at the right time in life, a

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