Someone asked, "How can you leverage a Term policy?

Someone asked, “How can I leverage a Term policy?” 

My first instinct, as it is for most agents, is to say that you can’t leverage a Term policy. At least not in the typical sense.

Then I thought about it for a moment and reconciled that yes, you can, in fact leverage a Term policy under the following 4 conditions:

1) Death of the insured while the policy is in force, triggering a death claim and a payout.

2) A life event qualifying a person to make a claim to activate the living benefits of the Term policy (if the policy has this type of benefit and/or riders, which not all do). This is typically related to a chronic illness, critical illness, terminal illness, or critical injury. This results in either a lump sum or monthly payout of a portion of the death benefit while the insured is still alive. Can be used to get medical treatment, cover living expenses, or make memories before one passes.

3) Viatical settlement (selling the policy for a lump sum of money).

4) Convert it into a permanent policy (Whole Life, UL, IUL, VUL) if the policy is convertible and within the conversion period, along with all other requirements met. This leverages the locked-in health rating given at the time of initial approval, without the need for a medical exam or proof of insurability. Once converted, the coverage becomes permanent instead of expiring at the end of the term. The permanent policy can now build cash value as cash accumulates inside the policy. This also unlocks other forms of leverage unique to these types of policies and Access To Money™ – your own personal ATM™.

If you have a Term life insurance policy and would like to know what leverage options you have, we offer a complimentary review with no obligation. Contact MODERN Financial Group™ at (864) 334-7273 or at ModernFG.com.