Published by Rick Cronin on April 28th, 2021

I was thinking the other day, and how many things in life stay truly constant? Your favorite sports team? Maybe, but the players change, the coaches change, heck, even the uniforms and the cities they reside in sometimes change. With that, your interest waxes and wanes too.

Coming around to maybe a more apt analogy for what I’d like to discuss; the weather. I live in Colorado, so we certainly get to experience every season. And, as the weather changes, our wardrobe changes; we take off or put on layers depending on the circumstances.



So, if things are constantly changing and we’re constantly adjusting to those changes, shouldn’t we be doing the same thing with our life insurance? Why yes, yes we should. And, in many cases that means combining a permanent and term product. Here’s why that makes sense.

It means better protection

When you’re young, maybe buying a house and starting a family, your life insurance needs are high. When you’re a bit older, maybe into retirement, your kids have moved out and maybe you don’t have a mortgage anymore, well then, your life insurance needs are low. It’s that simple.

When combining perm and term life insurance, you can buy a permanent plan for a consistent level of protection (which will last you into your later years), then combine that with a term solution that covers you when your needs are higher. It’s a better way to protect employees. Back to that weather analogy, when it’s cold, you put on a jacket (term coverage) and when it’s warm, maybe you just get by in your t-shirt (permanent coverage). By offering both, you don’t end up shorting employees on their coverage and you don’t end up with them buying more than they need, which leads to my next point…

It’s a more cost-effective solution

Permanent life insurance products are (typically) more expensive. If you’re buying a life insurance product you may be able to buy less permanent coverage if you can supplement with term policy. Working for a company that currently offers a permanent life insurance product, it may seem counterintuitive to recommend buying less permanent life insurance. But, if you buy a permanent product as a baseline and supplement with a term product during the years you need more coverage, you end up with smaller permanent coverage and, in many cases, end up paying less.

Now, Trustmark does offer our unique Universal LifeEvents® product, which will automatically adjust to offer a reduced death benefit in later years (effectively simulating the term/perm combo). This makes it not just an easy solution to tackle changing needs but cost effective too!

The right product protects for more than just a death benefit

Some forward-thinking products (like Trustmark’s) also offer living benefits employees can use for long-term care. Now, this isn’t necessarily part of the life insurance conversation, but it’s important because it means that you can offer even more value with a combination of permanent and term coverage. Not only are you offering the right protection, at the right price, you’re then offering bonus coverage for long-term care which has become a major issue for many employees and employers.
 
It may seem like an obvious strategy – offer protection that matches to employee needs. But, the truth is, I see far too many employers only offering a permanent or term product without a way to address their employees changing needs. Most people buy life insurance for the future, but don’t take into account their changing needs between when they’re buying and that future they envision. Combining permanent and term products is a great way to help manage that change.