January 23rd, 2007 | 
Author: 
Rich N asked:
At age 43 I am half-way through a 20-year term life policy at a decent monthly cost.
My question: Even though I’m ten years older than when the policy started and, thus, a new policy would cost more, is it worth it for the long run to end this policy and start a new 20-year one? i.e. “leapfrog” or “ladder” policies.
I’m thinking that, otherwise, in 10 years when my current one expires, I’ll be at at 53 and any policy then would be more expensive than a new one at 43.
Linda
At age 43 I am half-way through a 20-year term life policy at a decent monthly cost.
My question: Even though I’m ten years older than when the policy started and, thus, a new policy would cost more, is it worth it for the long run to end this policy and start a new 20-year one? i.e. “leapfrog” or “ladder” policies.
I’m thinking that, otherwise, in 10 years when my current one expires, I’ll be at at 53 and any policy then would be more expensive than a new one at 43.
Linda
Posted in Insurance | 
Tags: 10 Years, Current, Insurance, Insurance Policy, Ladder, Leapfrog, Midway, New Year, Term Insurance, Term Life Insurance, Term Life Policy, Year One
There’s only one way to find out. Go get some quotes for another 20 year term policy. And pull out your paperwork, if you have a guaranteed renewable clause on your old policy, see how much the guaranteed renewal premium is.
Run the numbers. ALWAYS run the numbers.
Also, you might want to redefine your goal. Is there a point when you don’t think you’ll need life insurance? If not, you probably should consider a permanent insurance type.
Life insurers do not like term policies as I understand it. If you are in in good health I would price shop for a second term at your favorable age of 43. Think I am agreeing with your “ladder” approach. I am not fond the idea of the agent being “your friend.” I view them as one of the opponents in the process. But, you are at a great age to add a second term policy. Please don’t let someone “bait and switch” you to something other than what you want. It is in that context that I suggest you have a second policy with another insurer. Good luck.
This sounds like a term insurance agent trying to squeeze more premiums out of you becuase he doesn’t sell whole life so this is the only way he’ll get more commission out of you. Find a new agent!
If you are concerned with what the cost will be when your term expires convert it to whole life now…that’s the advice you should be getting. I have never heard of anyone laddering policies. That is an investment term for gauranteed investments. I would be very cautious of doing this if I were you.
The only time this would make sense if if you bought a bunch of term policies at the same time and set them up at different terms so as your need reduces policies expire and even at that you would not be taking advantage of bulk prices when you have one large policy. Sounds shady to me.
I would ask, how long do you want the insurance for? If your healthy (prefered or better), term rates have been coming down for years as life expectancies grow longer.
Term insurance is workable until your about 70, than it becomes too expensive. If you live a normal life, it is expected that you will out live your term insurance.
If you want to extend your term insurance beyond the next ten years, look at:
1. annual renewable term insurance if you want it until about age 70. It grows more expensive each year, but not much more than inflation until your late 60′s
2. Universal Life insurance, with a death benefit guarantee until age 100. paying the lowest premium to keep the guarantee in effect.
If you’re going to need coverage beyond the time frame your policy covers then you should absolutely make that adjustment now while you’re healthy.
You can use the TOOL on my site which will quote up to 150 different companies AND REQUIRES NO personal information to use. You can shop companies on your own that way….