Many people don’t want to purchase a permanent life policy because it is costly in comparison to term life insurance. Many also feel that after a period of time, they will no longer require the life insurance they once needed perhaps while they are raising a family. Pekin Insurance, one of the carriers represented by Insurance Professionals of Arizona has come up with a product that is somewhat of a hybrid between term life and permanent life insurance. Transitional Term Life Insurance provides a high, level term death benefit for the selected period, ending with a lower paid-up permanent whole life death benefit of an amount chosen by the insured at the time of policy issuance. All the policy values are fully guaranteed.
For example, let’s say you want a $1,000,000 term life policy for a period of 20 years but after 20 years, your plan is that your home is paid off, you are out of debt, your children are raised and gone from the house and you no longer need the $1,000,000 you once did; however, you do still feel like it would be nice to have some life insurance that would pay final expenses and maybe leave something left for the grandkids. With Transitional term, you could set the term limit for $1 million for 20 years and at the end of the 20 years set the policy up so that you would have $50,000 in paid-up whole life insurance that will not go away for the rest of your life and you will not need to contribute to or pay another premium toward that $50,000 for the remainder of your life. The $50,000 is fully paid up and guaranteed. I am using $50,000 as an example but the amount could be anywhere between $10,000 and $950,000 in this example.
With Transitional Term life you kind of get the best of both worlds, and it helps to keep the cost of your life insurance down. The reality is that less than 3% of term life policies ever pay a death benefit. That’s because as people get older, the premium gets expensive and unaffordable so most people do not renew their policies. With a transitional term life policy it is almost like you are getting your premiums back that you put into the policy over the years to protect your family should something bad happen to you as the income producer.
If you would like a quote on transitional term life insurance or learn more about how this product can help protect your family calls Kent Stewart at 480-981-6338 for a free, no-obligation consultation.