This is a very common story. A young couple, both in their mid-30s, are parents of two children and hope for a third child in the near future. He has a good management level job, and his salary enables her to work part-time right now. The insurance protection they need now is considerable. Together they have decided that they need a minimum of $600,000 of coverage for him and $300,000 on her life. These levels would be enough to maintain their current standard of living should something happen to either one of them. Mortgage and car payments, as well as other debt would be taken care of. She would not have to go back to work full-time immediately if widowed.
This couple recognizes the advantages of cash value life insurance, but with their growing family they have thought they could not afford it. What they and many others may not realize is how easy it is to customize life insurance to a family’s individual needs. A plan can be laid out to maintain a high death benefit while converting term insurance over to permanent over time.
A solution that fits them
What this young couple decided to do was to purchase $100,000 of cash value insurance with a $500,000 20-year term rider. They also elected to add an additional insured 20-year term rider for $300,000 of coverage on her. *
Their initial annual premium is $1,931 or $160.85/month for $900,000 of needed coverage. If they elect to convert the term insurance to permanent, their premiums will change, but they will add to cash values over time, too. They see the cash value they can build in their insurance policies as an asset that they could use if needed for expenses such as college tuition for their children or use in their retirement.
This plan lets them keep premium costs relatively low now, yet gives them guaranteed, permanent coverage. With their advisor they sketched out a plan to convert as much of the term insurance to permanent as possible over time. The premiums charged at conversion reflect their ages so the sooner they do this the less expensive the premiums will be. This conversion privilege has no additional medical requirements. Their intention is to keep to the schedule to convert to permanent and their advisor will help keep them on plan. For this couple, they feel that they have found the right solution for them - to get the coverage they need and enjoy cash value growth and all the other benefits of permanent insurance.
This is just one example of how life insurance can be tailored to fit a family’s needs and circumstances now and in the future. Universal life is another option offering lifelong protection, premium flexibility, adjusted coverage and cash value growth. Consultation with an advisor is the best way to determine the right plan for you.
Do you know how much life insurance you need?
*Value Life, Base Plan $100,000, Waiver of Premium, Primary Insured Level 20 Term Rider, Male, Age 35, Select Plus Rating, Additional Insured Level 20 Term Rider, Female, Age 35, Select/Non-Tobacco Rating. Withdrawals of cash value will lower the death benefit if not repaid. Coverage is not guaranteed and subject to the underwriting process. Catholic Financial Life is headquartered in Milwaukee, WI. Products and services are not available in all states. Value Life Policy Form # ICC10 WL; ICC10 20 YR1 TRM RDR; ICC10 20 YR2 TRM RDR.