Put “Side-boosters” On Your Term Insurance Plan
The world watched as Artemis II took the U.S. space program on its first manned step toward beyond Earth’s orbit in 54 years. A common sight is the side-boosters on the rocket that allow for the easy disposal of those sections’ weight once they are no longer needed for a fuel source as the space-craft approaches orbit.
Term life insurance plans should be structured so economically!
Consider a 35-year-old male preferred non-smoker making $100,000 who wants income replacement protection until anticipated retirement at age 65. The annual level premium for a 30-year $3,000,000 policy ($100,000 x 30 years) is $2646.Not too bad, but the cost over his working life will be $79,380.
But he has less years to insure for as time goes on. So, assume he reduces the death benefit to $2,000,000 after year 10, and to $1,000,000 after year 20. His total savings would be $26,460.But many carriers severely limit or do not allow face amount reductions. And even if they do, he has paid 30-year rates on two-thirds of the coverage he did not need for that long.
As an alternative implement “side-boosters” by “laddering” three term policies as follows:
- $1,000,000 in 10-year term for $298 annually…
- $1,000,000 in 20-year term for $509, and…
- $1,000,000 in 30-year term for $882 – the total premium over 30 years is reduced to $39,620, a total savings of over 50%!
Laddered term can be accomplished in a single application with instructions in the Comment Section for structuring the multiple policy arrangement. But for a smoother take-off, contact Tom Virkler, JD, Director of Advanced Markets, at tom@cpsadvancedmarkets.com or 706-614-3796.