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Laddered term life insurance question – ladderlife.com vs tradition laddered

Home Insurance Laddered term life insurance question – ladderlife.com vs tradition laddered

  • Avatar bikerb 
    Participant
    Status: Spouse
    Posts: 2
    Joined: 05/09/2019

    First-time poster here as a spouse (in a week) of an almost chief Dermatology resident and I’m looking to see if anyone has experience utilizing the term life insurance provider Ladder Life (https://www.ladderlife.com/) for a “laddered” term life insurance idea as outlined in this blog post: https://www.whitecoatinvestor.com/layering-term-insurance-can-save-you-thousands/

    From my understanding with Ladder Life, you can decrease your coverage at $250k steps between $2MM-5MM, $100K between $1MM-2MM and $50K between $100K-$1MM all at a linear rate. Ex: if $1MM costs $300/month, $500k costs $150/month. They state you can decrease coverage any time you’d like with those $ intervals.

    I’d like to hear if anyone has had any experience with Ladder Life before I create a new spreadsheet calculating the total cumulative premium outlay with Ladder Life vs a more standard 3 tier ladder term life insurance plan as outlined in the blog post referenced above.

    Ladder Life is underwritten by Fidelity Security with an A- rating. I do understand they might not have some benefits such as conversion from term to permanent, etc.

    Thanks!

    #213487 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7950
    Joined: 01/09/2016

    You probably don’t want to pay for those conversion benefits, anyway.

    I bet you can get those same options from the recommended insurance agents on the WCI site. And I bet you can get them cheaper. Would be worth at least checking out.

    btw – congrat’s on the impending promotion! You deserve to be proud of what you both have accomplished.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #213563 Reply
    Scott at MD Financial Services Scott at MD Financial Services 
    Participant
    Status: Website Sponsor, Insurance Agent, Small Business Owner
    Posts: 429
    Joined: 01/14/2016

    You can typically change/reduce benefits in any amount with most carriers based on when you want to decrease coverage. Look around, you can probably build better rates when looking at product pricing from all carriers.

    S. Scott Nelson-Archer, CLU, ChFC with M. D. Financial Services, Inc.
    Direct Phone 713-966-3932, Email [email protected]

    #213592 Reply
    Avatar fasteddie911 
    Participant
    Status: Physician
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    Joined: 05/31/2016
    medical school scholarship sponsor

    You can typically change/reduce benefits in any amount with most carriers based on when you want to decrease coverage. Look around, you can probably build better rates when looking at product pricing from all carriers.

    Click to expand…

    Not to derail too much, but to clarify, are you saying that a term policy can be reduced on benefit amount or term length at any given time, and that the premium will be adjusted accordingly?

    #213606 Reply
    Scott at MD Financial Services Scott at MD Financial Services 
    Participant
    Status: Website Sponsor, Insurance Agent, Small Business Owner
    Posts: 429
    Joined: 01/14/2016

    For the most part that is true, now a few carriers won’t allow changes in the first couple of years but for the most part, with the carriers we use for our clients, you can reduce the face amount and thus cost as you see fit. If someone is unfortunate and has a contract that won’t allow reductions then just buy a new contract, re-locking the term period at the lower face amount desired.

    S. Scott Nelson-Archer, CLU, ChFC with M. D. Financial Services, Inc.
    Direct Phone 713-966-3932, Email [email protected]

    #213608 Reply
    Avatar fasteddie911 
    Participant
    Status: Physician
    Posts: 300
    Joined: 05/31/2016

    Thanks, good to know.

    OP, it sounds like you did your research but have you also run the numbers accounting for inflation (eating at the policy amount), portfolio growth and potential risks?  I too strongly considered a ladder setup but went with a single 30yr policy after mulling those issues.  I figured the extra premium I’d be paying is worth the peace of mind knowing I won’t be underinsured at some future date if my savings don’t materialize as planned.  Of course you can buy more in the future, but the premium can be higher or you may become uninsurable.  IMO, the cost savings (over the policy life) isn’t a huge deal relatively speaking and wasn’t worth the small but non-zero risk, but ymmv.  However, now knowing the info Scott shared, the cost savings is minimized even further.

    #213672 Reply
    Avatar bikerb 
    Participant
    Status: Spouse
    Posts: 2
    Joined: 05/09/2019

    Thanks for the help everyone! I’ll do more research to see if the other policies allow for a change/reduction in the future and also ask how the amount of insurance relative to cost is calculated at the time of change.

    Fasteddie911: check out the spreadsheet in the forum post that I initially linked to (here for fast access: https://goo.gl/ms7FkZ) it includes inflation as well as portfolio growth estimates . Risks are the variables of course… we aren’t planning on having children but if that changes, then we would probably be under insured. Same issue if the market tanks at the same time as one of us passes. Hard to think about but it’s better to be safe!

    I’m trying to balance my cost savings brain against the fact that age 30, term life is pretty darn cheap. 😉

    #213693 Reply

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