30 May 2012 0 Comments

The Continuing Worker

Term Insurance is a great policy to use for a young wage earner who wants to replace income lost to their family if they die prematurely.  In today’s economy, however, many workers who would not be classified as “young” are still worried about how their spouse and kids would get along if their income stopped.  

More people are working past what was once considered to be retirement age. And it isn’t always by choice. Perhaps there’s been a second marriage with younger children. Or a home was refinanced, and mortgage payments will go on for years. Or retirement savings have vanished, or a pension failed to vest. Whatever the reason, the need still exists.  If you are age 65, your term policy just came to its end and you are insurable, the following chart shows you the cost of different types of policies if you need to continue $100,000 of protection:

$100,000/Male Age 65 (Preferred Non-Tobacco User)

Policy Type                       Annual Premium

10-year term                                        $776

15-year term                                     $1,018

20-year term                                    $1,372

30-year term                                    $1,930

Age 100 (UL)                                    $2,061

Age 121 (UL)                                    $2,105

 All of these premiums are guaranteed for the duration shown. Tell me when you’re going to die, and I’ll tell you which policy to buy. If our 65 year-old opts for a 30-year Term Life policy covering him to age 95, would he not be better off spending an additional $131 per year for a Universal Life policy that would cover him to age 100? And what if he lives past 100? The age 121 guarantee for $2,105 a year is certainly the way to go. One thing’s for certain: he shouldn’t cop out with a $776 annual premium for a mere 10 years of coverage. 75 really isn’t that old anymore.

In just a few more entries I’ll cover the remaining needs I initially named that call for permanent insurance…but I’m not ready to stop yet.  There’s plenty more to know about this important financial instrument called life insurance.

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