I just spoke to a 68 year old gentleman who was looking for a 30 year term life insurance policy. At his age, there aren’t any companies that would issue a term policy for 30 years, so we looked at a 20 year term policy with a $1,000,000 death benefit. If approved at Preferred Plus, the most favorable health class, his annual premium would be approximately $16,000 a year. The policy would take him to age 88, at which time it would be very difficult to secure a new policy.

Lifetime Term Life Insurance?

I know, there really isn’t a product know by this name. However, if it walks like a duck, etc., etc., it is a duck. A Universal Life Insurance policy with lapse-protection is a policy that lasts a lifetime (until age 121, in most cases). These policies won’t typically accumulate cash-value, like a whole life policy or universal life policy (without the lapse protection). Even when the cash value dips to zero, something that would be cause for alarm in a standard universal life policy, the death benefit and premiums are still guaranteed (provided the premiums are paid in a timely fashion). Let’s recap – guaranteed level premiums, guaranteed death benefit, no cash value – sounds like a term life insurance policy to me.

We quoted one of these policies for this gentleman and, if approved at the best health class, his premium would be $21,000 annually for a $1,000,000 death benefit. Would this make sense for this gentleman? If he could predict that he would die before age 88, the term policy would be the best choice, but being that he can’t, it would make sense to me for him to go with the policy that will pay the death benefit, regardless of how long he lives.

Term Life Insurance on a Universal Life Insurance Chassis

It seems that I’m not the only person with this idea. Several life insurance companies have ditched their term policies and replaced them with, you guessed it, guaranteed universal life policies with fixed-year guarantees – 10, 20 and 30 years. So now these universal life insurance policies are looking exactly like the term policies they replaced. And, there’s no downside to the consumer. These policies perform life a term policy and are even priced to be competitive with term policies from other companies.

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Richard Reich

CEO - Licensed Agent

Richard Reich CEO and Licensed agent

In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs.  Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client. I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so.  I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure. Please feel free to contact me at your convenience.