What is Lifetime
Guaranteed Term?
While most term life insurance is temporary, there are
now policies that have level term “like” rates
with lifetime guarantees. These policies “marry” the
strengths of level term life insurance and traditional whole
life insurance providing low cost long term protection.
Instant Term Life Insurance
Quote
How
Does Lifetime Guaranteed Term Life Insurance Work?
Lifetime term provides a fixed life insurance amount
at a guaranteed rate for your entire life as long as
you pay your premiums on time. It offers cost effective
rates like level term life but also offers the long term
death benefit guarantees associated with whole life insurance.
Lifetime term is actually a universal life policy with
a guaranteed premium and death benefit for your lifetime.
As with many universal life plans, a small cash value
may accumulate over time. However, cash value growth
is not an objective of this insurance. The main purpose
of lifetime guaranteed term insurance is to “lock
in” a low guaranteed rate that can never be increased.
As long as required premiums are maintained, the policy
will remain in effect for your whole life.
Guaranteed Insurance Coverage for Your Lifetime
Lifetime guaranteed term and universal life policies
have effectively bridged the gap between term life and
whole life insurance. Term life has the advantage of
being really inexpensive over a certain time period.
However, the main problem with term insurance is that
rates eventually increase and coverage becomes cost prohibitive.
Unlike term life, whole life is designed to last forever.
However, it is extremely costly and in many cases you
cannot buy adequate amounts of coverage because of the
excessive price. With lifetime term, you can get
long term death benefit guarantees normally associated
with whole life insurance at a price that more closely
resembles level term insurance.
Lifetime guaranteed term insurance is the most cost
effective policy when the goal is to maintain coverage
for life. The best way to buy it is to limit the cash
accumulation and pay the minimum premium to guarantee
the insurance.
Dial-in Guaranteed Term Life Insurance and Universal
Life
Some lifetime guaranteed policies can be designed to
provide a “shorter” guaranteed period of
your choice at a lower premium. These “dial-in” guaranteed
term policies allow you to further reduce your costs
by accepting a shorter guaranteed policy but still exceed
the age limits of level term insurance and in many cases
extend out beyond your life
expectancy.
Dial-in guaranteed policies are extremely effective
if you are between the ages of 60-80. The reason is that
most life insurance companies have age limits for level
term insurance. For example, if you are 75, most insurance
companies will not write you a 20-year level term policy
because of your age. With a dial-in guaranteed term policy,
you can pay a premium that will guarantee coverage to
a certain age (95 for example) without paying the full
premium to guaranteed coverage for your lifetime.
Paid Up Universal Life
Another great advantage of lifetime guaranteed term
is the ability to “pay-up” the policy so
that coverage is guaranteed but no future premiums are
required. The concept is simple, pay a little more for
a specified number of years and you can stop paying premiums
once the guarantees are satisfied. This is NOT the same
as a whole life policy that offers a projected point
in time when premiums MAY be discontinued subject to
certain dividends or interest assumptions. With paid-up
universal life, you can essentially determine how long
you want to pay premiums (say 10 years) and pay the extra
rate to guarantee the insurance with no future premiums
after that time.
Why Buy Term Insurance for Your Lifetime?
The main reason to buy term insurance for your lifetime
is for the guaranteed protection at affordable rates.
If you have long term needs for life insurance that cannot
be satisfied with traditional level term insurance and
have to desire to pay extra for the opportunity to accumulate
cash value, lifetime guaranteed insurance is the perfect
solution. In fact, you can buy significantly more coverage
if you consider term insurance for life versus ordinary
whole life insurance. If building equity is not an objective,
lifetime guaranteed term likely makes the most sense.
Some ideal uses for lifetime term include estate
tax planning and business
succession planning.
Summary
Lifetime guaranteed term, commonly known as guaranteed
universal life insurance, combines the most attractive
features of term and whole life insurance. It offers
low rates associated with level term insurance while
providing long term coverage guarantees like whole life.
It is a great way to protect long term needs that are
permanent and cannot be met with level term insurance. For
more details or for a personalized life time guaranteed
term quote, call MEG Financial today
at (877) 583-3955.
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Links On What Is Level Term Life
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