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I've been speaking about this concept for a few months now and thought I'd share a Real World example of how this would work for a typical family.  I've seen some examples others have written and, frankly, they seem out of this world.  The typical family won't buy $3 or $4 Million of life insurance coverage. They may need it, but they won't buy it because that amount of coverage is still pricey for the average family budget.

So, here's a more reasonable example of how this concept would work for a typical family.  I'm working with a client and this exact scenario right now.

Husband is 36, wife is 31. They have two young children ages 8 and 4.  He needs life insurance until age 66 and the wife until age 61.  It's determined that their life insurance need today is $1,250,000 for the husband and $800,000 for the wife.

Here's where the laddering concept is advantageous.  This family doesn't need this high level of coverage for all 30 years.  They only want the high amount while the children are at home and through the college years.  Then, once the children are on their own, they will have a base level of coverage during their peak earning years right before retirement.

My proposal was as follows:

Husband:    $250,000        30 year        $27.13 monthly
                      $1,000,000     20 year        $58.19 monthly
Total premium                                          $85.32

If he were to purchase a 30 year, $1,250,000 death benefit policy he would spend $112.88 or he could buy a 20 year, $1,250,000 death benefit policy for $71.84 but he would have to apply for a new policy at age 56 for $250,000 death benefit for 10 years and, even if he qualifies for the best rating class, it will cost $43.72 monthly.

Any way you slice it, this laddering concept saves him about $30 monthly over 30 years; nearly $11,000.

The wife's proposal also showed substantial savings using this concept so I won't bore you with the details.

This idea has been around awhile but not used much because, until recently, the policy fees associated with having multiple policies eliminated much of the savings advantage.  But this has changed.  Banner Life, which is a top life insurance company and always in the top 5 for price when I quote term life insurance, charges only one policy fee.

In my 20 plus years of helping Arizona families insure homes, cars, boats, motorcycles, and their lives, I've had the privilege of delivering on the promise of a life insurance policy to grieving widows (twice) who were so grateful and thankful that their husbands provided for them in this way.  If you want to get the most life insurance for your money consider this concept and give me a call.  I can be reached at (480) 336-2707 or you can send me an email at

Author: Richard Morris

Richard Morris, an independent insurance agent in Chandler, Arizona, has been serving and helping Arizona families with all their insurance needs for over 23 years. Visit his website at to see all the ways he can help you with your insurance needs or call the office at (480) 336-2707 or toll free at (888) 907-9349. Connect with Rich on Google+ and Twitter.
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