Term Laddering Life Insurance

When it comes to purchasing life insurance it is prudent to take a moment to determine the correct amount for your personal situation. Once you have clarity on how much death benefit you need, its time to decide on the product.

When it comes to purchasing life insurance it is prudent to take a moment to determine the correct amount for your personal situation. Once you have clarity on how much death benefit you need, its time to decide on the product. There are two types of life insurance, term and permanent. Level term life insurance will typically have a guaranteed death benefit and premium for either 10, 15, 20, or 30 years.

In the 1980’s several insurance companies offered decreasing term life insurance which was generally sold when someone took out a new home mortgage loan. This type of policy’s death benefit would gradually decrease down in coordination with the loan amortization schedule. In the late 1990’s insurance companies started competing for market share in the level term life insurance space which ultimately drove decreasing term life insurance off the shelf. Who wouldn’t want a guaranteed level death benefit that doesn’t decrease for the same price or less?

Term Laddering is a concept Pacific Insurance Group has been implementing for clients since the early 2000’s. Here is how it goes, instead of purchasing just one policy, you purchase multiple policies. Why would someone do this? Let’s unpack it.

For the sake of this discussion, “Joe” is a 37-year-old male who realizes he would like to have 3 million of death benefit because he is married and has small children. Joe has a great job in Bellevue Washington at a technology company where he is contributing to his 401k and taking advantage of his “Employee Stock Purchase Plan (ESPP)”. Joe realizes his net worth with be a lot different ten and twenty years from now, so Joe questions if he needs 3 million level term life insurance for the next thirty years; Joe wonders if there is a better solution.

After searching online, Joe realizes there is an outstanding life insurance agency in Bellevue Washington called Pacific Insurance Group and they have over 100 five-star reviews. Joe decides to call this life insurance agency and discovers they have the solution he is looking for, three level term life insurance policies, a 10-year term for 1,000,000, a 20-year term for 1,000,000, and YEP! You guessed it, a 30-year term for 1,000,000.

Here is the example of what Pacific Insurance Group created just for Joe:

Joe is a busy guy, so he was so delighted when he realized he didn’t have to meet in person and could do it over the phone. It took about 20 minutes to go through the options and submit the application which didn’t require any banking information. This gave Joe time to talk it over with his spouse and settle in on the appropriate term lengths and amount of death benefit.

A few weeks later, the insurance company made an offer at super preferred nontobacco and Joe was delighted to put three term life insurance policies in force and now lives with the peace of mind knowing his family will be protected in the event of a premature death. When Joe has free time, he occasionally swings by Pacific Insurance Group’s office at 40 Lake Bellevue Drive just to say “hi” and has become close personal friends with the owners who also have an 11-year-old son.

If your situation is like Joe’s, reach out to Pacific Insurance Group. They welcome the opportunity of exploring options for your personal situation.

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