Couple Planning for Children
With plans to purchase a home in the near future, they know they will need financial protection to secure their growing family. Although they’re just beginning their careers, they recognize the importance of life insurance but don’t have a large budget for a permanent policy at the moment.
Jules Advice:
After completing a needs analysis, $750,000 of coverage was the amount of needed. Due to affordability, they decided on $250,000 of whole life with a 20 pay option , and $500,000 of 20-year term life insurance, provide $750,000 protection for the next 20 years. The term life insurance policy would cover them during the years when their financial responsibilities are the highest, raising children, paying off a mortgage, and saving for the future. Term life is an affordable option that provides significant coverage at a lower cost compared to permanent life insurance. Their goal is to have minimum $500,000 of life insurance for life. So they plan on converting $250,000 to whole life when they have more funds.
Why the Client Followed the Guidance:
Jessica and Andrew liked the simplicity and affordability of term life insurance. They were able to secure coverage that fits their current budget and protects their family during the years when they’ll need it most. They also appreciated knowing they could convert the term policy into permanent insurance later on, should their needs change.
Key Takeaways
Outcome:
To ensure they had the right amount of coverage, Jessica and Andrew chose $250,000 of permanent life insurance (paid up in 20 years) and added a $500,000 20-year term rider. This provides $750,000 in coverage for their family's financial security during their most critical years, and includes the valuable option to purchase additional permanent insurance as their needs grow and budget permits.
Client Scenario
Jessica and Andrew are newlyweds in their late 20s, and they’re excited about starting a family.
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