Term Life Insurance Laddering Calculator

Written by Clifford Pendell

If you have more than one life event you need to insure, you could save money by laddering or layering your term life insurance.

Here's a real life example: Last month we worked with Dean, a 37-year old husband and father of two, from Minnnesota. Dean expects his children to move-out and graduate from college within 20 years, but he doesn't plan to retire until he pays off his house in about 29 years. 

After reviewing his options, Dean decided to buy a 20-year term life insurance policy to make sure his children have money for college, and a 30-year term to provide a source of income replacement if something happens to him before he retires and the house is paid off. 

Dean is in less than perfect health, so he qualifed for a "standard" or average rate class. Here is a breakdown of his savings:

• Policy 1= $500,000 in coverage for 20 years at $44.16 per month
• Policy 2 = $500,000 in coverage for 30 years at $75.50 per month 

Versus:

• Policy 1 = $1,000,000 in coverage for 30 years at $138.44 per month

Money saved for the first 20 years = $18.78 per month X 12 months X 20 years = $4,507.20

Money saved during years 21 to 30 = $62.94 per month X 12 months X 10 years = $7,552.80

Total Savings = $12,060

Written by:

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.