You Can Save Money On Guaranteed Universal Life Policies

Life Insurance

Everyone claims to like saving money, yet people often do not act in accordance with their stated desires. This is especially true when it comes to purchasing permanent life insurance in the form of guaranteed universal life policies. Did you know that with two of our carriers, MetLife and Protective, the default age that guaranteed universal life policies is 95? That’s great if you live to just shy of your 95th birthday, but most statistics say that you will not.

The overall life expectancy is the United States is just under 79. For Hispanics, the number is almost 81. For African Americans, that number drops to 75.  Asian American women, on average, can expect to live to nearly 86! (I could not find anything specific to Asian American men.) That means that generally speaking, anyone that purchases a universal life policy guaranteed to age 95 is overpaying from the moment that they get the policy until the moment that they pass away.

Knowing that it is improbable that you will live to age 95, why do people keep getting policies guaranteed to an age that they don’t need? I understand that for the most part, everyone wants to live as long as they can as long as they are healthy. I too would like to live a long time. However I do temper my expectations with reality. People in my family have not lived into their 90s. That’s not to say that I will not. However, based on my life choices and family history I don’t think I’m going to make it that long. What I do know, is that when I do pass, I want to have a life insurance policy in force to leave my family something and pay for my final expenses. Anyone can accomplish that in a practical manner if they are willing to have an honest conversation with themselves.

The point I’m trying to make is that you don’t have to get a policy guaranteed to age 95. Unless you’re an Asian female, you might consider getting a universal life policy guaranteed to age 85. From all the illustrations I ran, at various health ratings, the difference in price between a policy guaranteed to 85 versus a policy guaranteed to 95 is about 9% a year.

Of course the magnitude of savings is relative to the amount of insurance you’re getting. On a $50,000 policy at a standard non-smoker rating, a 9% difference in price may not seem that significant (for a 50 year old male, about $6/month). The spread on a $250,000 policy looks greater but the difference is still around 9% a year. If you multiply the spread by every year that you live, the amount adds up.

What I am not advocating is you getting less insurance than you need or for a shorter time period that is appropriate. I’m simply pointing out that you can get a permanent policy that by the numbers is better for you. After all,  I’m sure you have plenty of other things you can spend the extra 9% on. Ultimately, the most important time to have life insurance is when you pass away. Now you can know that you can customize a policy that fits your situation best. If you’d like to know more on how to accomplish this, please call me at 1-800-651-1953 or email info@pivot.com. We can find the right solution to fit your individual needs.

About the author: Anthony Veloso has been in the life insurance business for over 2 years. He enjoys coaching football, playing outside with his dog, and taking day trips with his wife and newly born daughter. Anthony is a strong supporter of Orphanages and Battered Woman’s shelters. He would love to put his experience to work for your family to ensure that you have the right life insurance policy. You can contact Anthony at 1-800-654-1953 or AVeloso@Pivot.com.