Blending Term and Permanent Coverage: The Best of Both Worlds
For those needing a large amount of coverage now but seeking the long-term benefits of permanent insurance, a strategy called “blending” is often utilized. This involves combining a core Whole Life policy with a term life insurance rider or a Paid-Up Additions (PUA) rider.
The Blending Strategy Explained
Blending achieves a high initial death benefit at a lower cost than a pure Whole Life policy of the same face amount. The policy is structured as:
- **Permanent Base:** A smaller, stable Whole Life policy providing guaranteed lifetime coverage and cash value.
- **Temporary Coverage (The Blend):** A low-cost term rider attached to the base policy to provide a large, temporary death benefit during peak need years (e.g., while the mortgage is active).
The PUA Alternative
Alternatively, the PUA rider can be used to “blend” the policy, focusing on increasing the cash value and death benefit quickly. This provides a high death benefit with a cash value component that term insurance lacks, offering a hybrid approach to protection and savings.
Disclaimer: This content is for informational purposes only and is not financial or legal advice. Consult a qualified professional to design a blended policy that suits your financial projection.