Pay less, get more
By Jeff Reed
Kestler Financial Group
Pay less, get more — a great strategy when you can pull it off. Unfortunately, there are few opportunities in life to truly get more while paying less. Here are two situations where you can:
There are big discounts (as much as 23 percent) available when a client elects to "pre-pay" their insurance with a one-time payment. Why shell out the single pay instead of paying as you go? Economically, it makes no sense, as the discounted premium produces a lower rate of return based on it being paid all in the first year. When there are other complicating factors, like a messy, or even not so messy, divorce, using a "one and done" approach begins to have some appeal. Instead of having that premium payment remind the client of the not-so-good times each year, they can put it squarely in their rear-view mirror where it belongs, while still meeting their obligation under the divorce decree.
One of our carriers allows for a portion of the death benefit to be paid as an income stream rather than a lump sum. There are pros and cons to this, of course, with control being primary among the cons. However, like the example above, when we focus our attention on the "why," some significant uses for the discount present themselves. Turns out this product also has a chronic illness rider that can be added to the policy. As an optional rider providing access to 100 percent of the policy face amount via a monthly benefit, there is a cost associated with it. Using the income stream option for just enough of the life coverage and the corresponding discount to offset the LTC costs results in, you guessed it, getting more for the same premium.
In either case, remember that in some cases, the "more" is peace of mind. Tough to put a price tag on that.