Young Family Sets Up Affordable Lifetime Protection

Meet Theo

Theo recognizes that he needs to protect his mortgage and his family’s financial future, but understands that even a 30-year term life insurance policy won’t protect them long enough. He wants to guarantee that his family is financially protected for his entire life. Lucky for Theo, he learns that he can achieve both goals – low monthly cost and lifetime protection – by blending together some whole life with his term life policy.

Theo’s situation

Theo is 31 years old and is married to Amy. Together they have two young children, a $400,000 mortgage and some pretty typical college debt. Money isn’t too tight but he needs an affordable monthly premium. He wants his family to be protected for life; but like many, he can’t afford using a whole life policy for all his coverage needs. He’ll have to go with term insurance as his main coverage, but knowing that a guaranteed level premium can only last until age 61, he’s not sure how to get everything he wants.

First, Theo considers his budget and coverage needs. He wants to make sure his wife is provided for in case the unexpected happens, and he wants to be sure that the kids have everything they need growing up, and that their college expenses are covered.

But once the kids are grown and the mortgage is paid down, Theo knows his family won’t need as much coverage. Later on, he just wants a guarantee that Amy will be financially secure and that his funeral costs aren’t a burden.

Why Theo chose whole life

Theo consults with an expert and finds out that he can meet all his goals. Since he is young and healthy, he can affordably blend a majority of term life protection with a smaller amount of whole life. Since he calculated his coverage need to be $800,000, Theo decides to buy a 30-year, $750,000 term life policy and then use whole life insurance to cover the remaining $50,000. In the process, he finds out that whole life also provides him with some unique tax benefits while he’s alive, and that should he ever need to, he can borrow money from the policy’s cash value.¹

Theo is relieved to check this off of his to-do list and is pleased to know that should something unexpected happen to him from now until age 61, his family will receive $800,000. After that, even if he decides to stop paying his annual term premiums, he still has the guaranteed death benefit of $50,000 from his whole life policy. At some point, his family will receive it tax-free.

Want to know how to make blending work for you? Finding the right life insurance policy can feel challenging, but with our team of knowledgeable advisors, you can rest easy knowing you’ll receive personalized guidance in a stress-free setting. Contact us, we’re here to help.

¹Loans will reduce your cash value and death benefit. Unpaid loans are subject to ordinary income tax and, if taken prior to age 59½, a 10% federal tax penalty and may be subject to interest charges.

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