As part of the coverage couple’s FAQ series, we’ll be answering the question “Can I combine life insurance policies on myself or family?”
Can I combine life insurance policies?
This question, like all of our FAQ’s, is one we’ve heard often (and recently submitted to us). The answer is YES, you’re able — and even advised — to combine the protection offered by more than one policy type and amount. The reason for this is very similar to the diversification rule of investments, which isn’t surprising because life insurance is an ongoing investment, and the ONLY INVESTMENT guaranteed to payout. In fact, when compared to mutual funds, the stock market, or 401ks and IRAs ETC., life insurance puts them all to shame as far as not only revenue potential of money in vs. money out, but payout assurance!
As we’ve discussed in other FAQs and as a part of our proven consultative philosophy, with the solutions we provide you no longer have to think of life insurance merely as death insurance. “Death insurance” is what door-to-door salespeople of the last 100 years would solicit, carrying a bulging briefcase with a library of confusing documents and contracts. What those outmoded salespeople were hocking was a death benefit that had one trigger and one purpose: Death, and to cover the raw estimated (often inaccurate) costs of a funeral. That short-sighted and overpriced gimmick isn’t how the market should function, and certainly not part of the proposals we draft at thecoveragecouple.com!
The reason for the combination of insurance isn’t primarily to boost your total coverage amount, we actually advise people against the faulty more-is-better logic (better is better). The smart strategy is to diversify your coverage types, rather than coverage amount. By securing a few strategically designed policies, you can ensure no matter what life or death has in store, you *and* your family will be protected, provided for, and given peace of mind affordably. For example, you might have heard of a policy type called “whole life.” While whole life is recognized by several names, its function is to guarantee beyond all doubt there will be instant tax-free money available for your loved ones upon your death. While this is the entire goal of life insurance, there are some things to consider:
Whole life is an excellent foundation for a well-structured portfolio of fixed and variable estate and investment planning strategies. It’s always best to rely on the sure-thing. But, the sure-thing comes at a price, and depending on your age, might not be the most cost-competitive when compared to other, equally beneficial, types to choose from. A common and smart practice we suggest and consumers lean on, is the reinforcement of their “base policy” with supplemental, situational, affordable coverage. For instance, if you’re in the midst of your career/working years, perhaps somewhere in your 40s, in conjunction with a guaranteed death benefit policy, a level term-specific policy would fortify your future (for fractions of pennies on the dollar).
You can select a reasonable term where you’re protected against ALL loss of life AND health, until you’re into your retirement years when you’ve paid down assets and can “self-insure” to a degree. This approach allows you to fully vest your retirement, and make more aggressive investment decisions during your highest-earning years. In short, your financial resources should always be working for you, rather than being socked away into a savings account or shoebox.
There’s other options such as fixed annuities, or our favorite financial phenomenon at thecoveragecouple.com known as an IUL. The details really go on forever, which is why we focus on simplifying the complicated, and eliminating the white-noise of choices that make no sense and have no bearing on your individual goals!
We commit to conducting deep investigative research for you, and would like for you to reserve time with us, without any cost or obligation. We’ll carefully listen, and then follow up with a proven, practical, custom proposal for your review. HERE is our official invitation to take part in The Coverage Couple Challenge, where EVERYONE WINS. Visit the Scheduling Page at thecoveragecouple.com to see how much we can save you on your existing coverage, or provide a financial risk assessment and needs analysis for your review if you’re unprotected and univested. We hope to hear from you soon, because your life is worth the investment! -Aaron & Sarah, The Coverage Couple