​Laddering Life Insurance Policies

Laddering is a financial planning concept that involves buying more than one life insurance policy so that they mature at different times. The concept helps you to purchase the right amount of protection when you need it most – matching the product to the need. It can be a cost-effective way of protecting yourself from being over insured or under insured as your financial assets and responsibilities change over time.

Match The Product To The Need​

When clients inquire about what type of life insurance to buy my response is simply "match the product to the need.”  This may include a portion of life insurance in some form of permanent life insurance.

What are some examples of matching the product to the need?
  • Purchasing a 30-year level term policy to match your 30 year mortgage.
  • Purchasing a 10 or 15-year level term policy to fund college for your 15 year old child.
  • Buying a permanent policy to cover final expense, to make a gift to your favorite charity, pay estate taxes or help the grand kids.
  What is Term Life Insurance?
  What is Permanent Life Insurance? 
Saving Premium Today and Tomorrow

Laddering your life insurance may save you money two ways. Your Initial combined premium may be less because your portfolio includes policies of a shorter term   Also, the cumulative premium will be less because the cost of the shorter term policies will be eliminated when they expire.

Is Laddering Right For me?

Laddering is based on the concept that your need for life insurance will decrease over time. This may not be true for everyone. Remember, life insurance is purchased to protect against the unexpected.  Laddering and term life insurance are best suited for the disciplined investor who can save for long term goals. It may not be good for those who do not have a solid understanding of their future financial needs or lack the discipline for long term asset accumulation.