Newlyweds and young families are often on a budget yet understand the need for life insurance. Those with dependents seek lifetime coverage and the peace of mind that specific life insurance policies bring. Mortgages must be paid, children must attend school, and day to day expenses continue as time goes by. If something were to happen these expenses must be covered if the family is to thrive. In the long term, many young families want financial growth and possibly build a generational legacy.
Unfortunately, many young adults only have life insurance through an employer, and such coverage ends when they quit or retire. Possibly they purchased a term life policy or a guaranteed universal life insurance policy. The downside to these policies is that they rarely offer flexibility to adapt to changes in life.
Blended Life Insurance, Budget Friendly
A whole life insurance policy that is guaranteed, permanent, and offers level premiums and death benefit is a great start. Such coverage offers cash accumulation as well. Adding a term life rider to the whole life policy multiplies the death benefit. This blended coverage is budget friendly and can be adjusted to meet the specific needs of each family.
Example
A 29-year-old male, married, no tobacco use, baby. With the rising cost of living and a modest budget, he wants to protect his family but isn’t sure it is possible.
The applicant is pleasantly surprised to learn that for $150 a month he can purchase $130,000 in permanent whole life insurance and a $370,000 20-year term life insurance rider. That’s half a million dollars in coverage for $150 a month! In ten or twenty years as the mortgage has been paid down and the whole life insurance cash value has grown, the applicant may wish to cancel the term policy. Or possibly the applicant may want to convert the term life policy to guaranteed whole life… without having to provide evidence of insurability!
It Gets Better
Depending on the policy, added benefits may be available such as an Own Occupation Waiver of Premium rider. For less than $10 a month this rider offers coverage during a disability. Accelerated Death Benefit riders are also available for no additional premium which may be helpful in cases where a terminal or chronic illness is involved.
The applicant, at age 65, may choose a Reduced Paid-Up option regarding the original $130,000 whole life insurance policy. Choosing this option will cost around $3000 (his beneficiaries receiving around $127,000 instead of $130,000) but the applicant will never have to pay premiums again. The applicant retains the cash value of the policy and the Accelerated Death Benefit option.