By Gary Proco
Oct. 23, 2018.
While there are multiple stages for life insurance, let’s focus on a specific group of people ages 30-50. This age group consists of Gen X and Millennial generations.
First, consider income replacement. The size of the loss is equal to the years remaining in the workplace times the expected total income earned. Should they die, those who depend on them may suffer financially for years to come. This is why this group generally has the largest need for death benefit protection.
But, we have only been discussing pre-retirement income replacement. What about the risk of running out of money post-retirement? Everyone knows that Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it earns it…he who doesn’t…pays it.” So how can the average person use this? Time is king when it comes to compound interest. Therefore, while younger, it is wise to have death benefit protection plus cash value growth which can help supplement retirement income for their future, retired selves. This can be done through permanent life insurance, or in particular, indexed universal life insurance. This product not only provides death benefit protection but the potential for cash value growth to help while they’re living.
The point is to simply illustrate that in a world where people often live 20 to 30 years in retirement, both term life insurance and permanent life insurance can play an important role in providing wise financial protection. Indexed Universal Life products are not security investments, investments in the market or in the applicable index and are subject to all policy fees and charges normally associated with most universal life insurance.