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Is There a Benefit to Having Policies with Different Term Lengths?

2019 March 15
by zanderins

“Laddering” policies is a common strategy, as many people anticipate needing less life insurance as they get older and are further along in their debt-free journey. This is where the Insured staggers policies at varying term lengths to cover specific needs, and is especially helpful if you have major financial obligations that end at different times. The face amount for each policy would reflect the amount of money needed to pay off a specific obligation. For instance, an Insured may have one 15-year policy to cover their mortgage, and a 20 or 30-year policy related to other needs such as income replacement until retirement and education expenses for their children.
An additional benefit to laddering policies is the potential cost savings over buying one long-term policy with a high amount of coverage, as shorter term periods result in lower premiums.