Life insurance is part of a complete financial plan, along with your retirement accounts and other investment strategies. Your policy’s benefits can help your family pay for final expenses, keep them in their home, pay for a child’s college education, and ensure your spouse can pay the bills if anything should happen to you.
But did you know there are three different ways to pay for your life insurance policy? We can help find the plan that’s right for you.
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Method #1: Single Payment
Did you know you can fund your entire policy with one payment? This strategy works best for:
- Parents working on their estate plan who want to pass wealth their children
- People who received a lump sum of money from an inheritance or life insurance death benefit from a loved one
When you pay for your policy all at once, we’ll help you get the permanent policy that best meets your needs. You choose the death benefit amount and the number of years you need guaranteed coverage. We’ll calculate how much your single payment will be. Instantly, your policy is paid up and guaranteed to protect your family.
Why use this method? It offers significant savings over the life of the policy. Here’s a quick hypothetical example. Let’s say you purchase a $500,000 guaranteed universal life policy. The annual payment for this policy would be about $5,000. Over a 30-year period, you’ll pay $150,000 in premiums for that half-million of coverage.
However, if you paid for that policy with a single payment, your premium would be a one-time sum of $105,000. You’re saving approximately $45,000 over the life of your policy!
Method #2: Monthly Payments
Most of our clients pay for their policies a month at a time. If you don’t have a lump sum of money from an inheritance or a death benefit that came to you from a loved one’s own life insurance policy, this makes the most sense.
When you use our easy online quoter, you’ll see an estimate of the monthly and/or yearly payment for each policy available to you. This makes budgeting easy!
Do be aware that the cost you see is still just an estimate. Because life insurance is a medically underwritten product, your final rate will also depend on your medical exam. Every insurance provider takes your exam into consideration before making their offer to you–if this isn’t something that will work for you, consider a no exam life insurance policy instead.
Method #3: Shortened Payment Plan
Just because your need for coverage lasts a lifetime, it doesn’t mean your payments have to! You can always pay your premiums over a shorter time frame by paying more in the early years of the policy. Why is this a good idea? You’re in your peak working years, when disposable income is easiest to come by. Paying off your policy during these years will leave you covered–without more payments–during retirement, for example.
We’ll work with you to determine the right policy size, how long you want your coverage guaranteed, and the number of years you want to make payments. Once we’ve got the right policy to fit your needs, you buy the policy and make the planned payments in your shortened payment plan. Once those payments are complete, your policy is guaranteed.
But what if something happens and you can’t make the higher payments you thought you could? Don’t worry. You have the flexibility to reduce your premium amount and extend the number of payment years without losing your coverage. That’s part of the flexibility built into universal life insurance, a customizable policy type that covers you for your entire life.