Dollars for Pennies Apiece

This is what we sell in our industry. Dollars for pennies apiece. Dollars for future delivery at a time when they are needed the most. These are the proceeds received through life, disability and long-term care insurance.

Compare the premium paid per year to the ultimate benefit to be received at the time when you, your family or your business need it the most; at the time when the policy pays out the proceeds it was designed for.

Let me demonstrate what I mean. If you are a healthy 45-year-old making $50,000 per year, you would probably qualify for 10 to 20 times your income in life insurance, and the rule of thumb is that you will need at least 10 times your income in life insurance.  Let’s assume you purchase $500,000 of new life insurance. How much will it cost?

A permanent cash-value life insurance policy with a level premium paid to age 100 would cost approximately $300 per month while a 20-year term life insurance policy would be less than $50 per month. Compare the premiums paid to the face amount of the policy—the ultimate death benefits to be received. The permanent cash value policy costs less than one penny per year for every dollar of death benefit. That means you are paying less than 1% of the face amount of the policy per year to provide your family an ultimate benefit of $500,000; less than one penny per dollar per year.  Now that is what I call dollars for pennies apiece.

Marvin H. Feldman, CLU, ChFC, RFC, President and CEO of Life Happens

by Marvin H. Feldman

Marvin H. Feldman, CLU, ChFC, RFC, is president of the Feldman Financial Group in Palm Harbor, Fla., and president and CEO of Life Happens. He is a 41-year Million Dollar Round Table member and was the 2002 president. He is a 33-year member of the MDRT Top of the Table and a past Top of the Table chairman. He also is the recipient of the 2011 John Newton Russell award, the highest honor bestowed on an individual by the insurance industry.

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