How to cover your Life Insurance needs for “Free” using 20 Pay Life Insurance…
If I told you there was a way to cover your Life Insurance needs with literally no cost to you, would you believe me? Most people would think there is some sort of a catch or there was something shady going on. It sounds too good to be true. How can an Insurance Company do this, and where can I get mine?
The Life Insurance product I am talking about, is a good 20 Pay Life Insurance product.
Here is how it works, you choose the coverage amount you are interested in, say $100,000. But in this case, you are not going to be using cheap Term Insurance, you are going to be selecting Permanent Insurance. Insurance that will be there for you, no matter how old you are when you pass away. Because it is true, that it is not if we die, but simply when we die.
When the Insurance is selected, we choose the 20 Pay option. This means that you will pay for the Permanent Insurance only for 20 years, and at the end of the 20 years, there are two options available to you.
1. You like the Insurance and choose to continue on with the coverage. In this case you are not responsible for paying any more premiums past the 20th year, and the Insurance is guaranteed to be there for the rest of your life, with no more payments due.
2. You are satisfied that the Insurance coverage is no longer needed and you can then cash in the policy. Here's the "Free" part. Nearly all of the money you had invested over the last 20 years is returned back to you, as very tax efficient Accumulated Cash Value. The only part of the premium you paid every month that is not returned to you is the monthly policy fee, usually that equates to about $7 per month, so no big deal.
So here is a real world example to show you the value of this protection.
Suzie is a 35 year old mother who has just had a baby and she is interested in making sure there is Life Insurance coverage in place, in case anything happens to her for the next 20 years. Suzie does not smoke, and is in good health, so she looks at a 20 Pay Life Insurance product.
The cost: $70 per month
The Time: 20 years
Cash Value in 20 years: $17,000
This is a great option for Suzie for 3 reasons.
1. She gets the affordable Life Insurance coverage she needs, not only for today, but for the rest of her life if she chooses to keep it.
2. If she chooses to cash out the policy in its 20th year, she will have a large sum of money that she may even choose to use for her newborns Education Cost, what a great little nest egg.
3. If she chooses to keep the Insurance, and does not have to pay another dime for it, she has created a $100,000 asset for her family and it only cost $17,000. A pretty nice return on her investment.
So when we look at Life Insurance, it makes sense to look at all the options available to you. Even in the case of the 20 Pay Life Insurance, you can add additional Term Insurance on top of it to increase the Face Amount of Insurance greater than $100,000, but a "good" 20 Pay life if set up properly will create a great asset into your future.
Call us today, as not all 20 Pay Life policies are the same, and through our experience over the last 40 years, we have selected some of the best companies out there to Insure our clients needs.
As brokers, you know we always work in the best interest of our clients, and are able to search the marketplace for the best solutions available. Call us today to help you implement this valuable coverage into your Insurance Plans.