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Benjamin Franklin famously wrote in a 1789 letter, “In this world, nothing can be said to be certain, except death and taxes.” If we know this, should we guarantee a life insurance benefit at our youngest and healthiest age? This may be the million-dollar question.

Let’s take a deeper dive strictly from a death benefit play and examine term vs. permanent insurance premiums on a current 30-year-old to his life expectancy of age 85

Guaranteed universal life policy at top health rates:

• $500 a month
• Buys $1,529,413 death benefit
• Over the next 55 years a total of $330,000 funded into the policy

Let’s take the same client, though in this situation he only wants 20-year term – He is looking for the same death benefit of $1,529,413

30 years old purchases a 20 year term at top health rates:

• $52/mo.
• Over twenty years, premiums total $12,480

At 50 years old he purchases another 20 year term at Preferred health rates:

• $264/mo.
• Over twenty years, premiums total $63,360

At 70 years old he purchases his last 20 year term at Standard health rates:

• $4006/mo.
• Over fifteen years, premiums total $721,080

Term life insurance policies serve a very important purpose. It provides coverage for a limited period of time and is the most affordable type of insurance when initially purchased. Though, if one is to live to life expectancy it can be far more expensive.

It is common to think about term vs. perm as an either/or decision, it may be more appropriate to think of both. Especially if one believes there will always be a need for life insurance.

Contact your life insurance specialist if you think a combination is right for your client.

 

Small business owners often wear many hats – they are HR, IT, Senior Management, and Operations all-in-one. Being a small business owner can be tiring and time-consuming.

Appeal to this market by presenting them with a simple plan – so they can have peace of mind knowing their family and business will be in good hands when they move on.

Help business owners prepare for the future by using a buy-sell agreement.

71% of small business owners surveyed said they have thought about who would run their business in their absence, but only 35% of all surveyed had a business continuation plan.¹

Many business owners don’t have formal plans to transfer their business to a successor in the event of retirement, disability or death. A business may fail due to confusion and lack of a clear plan after such an event.

As a life insurance professional, you can help business owners create a continuation plan using life insurance policies.

How You Can Help Business Owners With Life Insurance:

• Establishes a guaranteed buyer at the time of the triggering event
• Sets a price for the business when the business owner is less vulnerable and ensures the business will be sold at a fair market value
• The surviving business owner(s) won’t have to run their business with the deceased person’s family members (if they choose not to)
• Provides liquidity, when the family needs it most, to fund the sale of the business to surviving partner(s)

We will help you prepare business valuations, design the proper life insurance proposals – give you the tools to become a business insurance expert.

Contact your Life Sales Representative today – maintain a competitive edge in the business insurance marketplace.

1. Lifehealthpro.com, New Tax Laws Open the Door for Business Insurance Discussion, April 2011. The survey was based on 874 small businesses with 100 employees or less.