Rice - Optional Term Life Insurance Alternatives

If you are healthy, regardless of your current age, there may be interesting alternatives to your university Optional Life Insurance. The university coverage is provided with reduced underwriting requirements, and gives you the opportunity to retain coverage for life. As a practical matter, though, rates increase every 5 years, and coverage drops after age 70 - eventually to only 10% of the initial death benefit. Ultimately, there is no economic reason to continue the coverage.

For people currently in good health, there are other commercial term life insurance alternatives with substantially lower premiums over time, and sometimes lower premiums at the time of purchase. These alternative policies, if you purchase 10, 15, 20, or even 30-year term, eventually expire. The longer the term, the higher the premium.

Another alternative is a leveraged  version of Indexed Universal Life Insurance. After getting such a policy "kicked off" with some up-front "seed money", one might be able to contribute the same money on a net basis as for the best alternative term policy. While not guaranteed, using high-probability rates of return and the guaranteed rate of borrowing, the death benefit would grow for as long as you live. The "seed money", if allowed to do its job for at least 10 to 15 years, may eventually grow many fold, and provide supplemental retirement income later.

To learn more, we invite you as our guest to lunch at Cohen House. Click here to make a reservation. At the luncheon, we will go over details on such as follows here: