Unlock more financial flexibility for clients’ financial lifecycles

Using Term and Perm Life Solutions To Create A Long Term Strategy

While term life provides temporary coverage for a certain period of time to financially protect expenses like a mortgage or college tuition costs, it’s permanent insurance that provides the foundational, lifetime death benefit protection.

When the two are part of a client’s long term strategy, they can create a balanced solution that allows your client to address both their immediate and future needs. This strategy may also address potential challenges concerning coverage and budget, without having to delay the purchase of permanent life insurance protection due to its higher cost.

A more comprehensive solution for long-term protection
The right type of protection throughout your client’s financial life cycle
Supplemental income: Permanent policies, like whole life, have the ability to accumulate cash value, which can be used to supplement income²

¹ American Council of Life Insurers
² Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

Blue incomplete circle with text inside saying nearly 1billion American families depend life insurance for financial stability. (footnote 1)

Weighing the options

Combining Term Insurance with a Permanent insurance policy can provide the life insurance protection your clients need throughout their financial life cycle. One particular way to achieve effective coverage is to purchase term insurance, with the ability to convert all or a portion to permanent insurance, like whole life.

This chart represents a hypothetical combination of term and whole life insurance, and includes the cash value pattern of whole life coverage assuming that cash value is not accessed. It is not intended to represent specific products.

This chart represents a hypothetical combination of term and whole life insurance, and includes the cash value pattern of whole life coverage assuming that cash value is not accessed. It is not intended to represent specific products.
It assumes that a 20-year term life insurance policy and a participating whole life policy are purchased at age 40, and that a portion of the term life insurance is converted to whole life insurance at age 45. Guaranteed cash value will increase each year.
Additionally, any whole life policy dividends (which are not guaranteed) that are received are used to purchase paid up additional insurance.

Click on the tabs below to explore flexible and affordable term and permanent life insurance solutions to address your client's long term protection needs.

Term layering concept

A life insurance strategy that fits. For life.

A sound life insurance protection strategy addresses your client’s coverage needs today, over their working life and even during retirement.

This may involve “layering” coverage by purchasing convertible term life insurance and a certain amount of permanent life insurance. During the conversion period, term coverage can be converted to permanent coverage, to meet your clients’ long-term protection needs. The idea is that, by combining the purchase of these policies, your clients will have an appropriate amount of life insurance protection throughout their financial lifecycle.

Learn more:

See how Wayne and Vanessa made it work for their family (PDF)

Creating a life insurance strategy (02:27)
Many clients see the value of whole life insurance, but many not have the current budget for it. A combination of MassMutual Term and Whole Life insurance may be the solution. Watch this video to learn how.

Term/Perm layering with Whole Life 100 client email (PDF)
This is a client-approved email available in Gainfully that promotes a short sales idea (LI5017) on owning a combination of term and Whole Life 100 and how it can be an affordable strategy today that can grow with clients over time. Search LI3004e in Gainfully.

Laddering life insurance

How to talk about Term and Universal Life (UL) insurance with your clients

Get comprehensive life insurance coverage that fits your clients budget using a tiered approach. Instead of buying one large life insurance policy, use the laddering strategy. This approach involves buying smaller policies with different durations.

Learn more:
Blog: Life insurance: The ladder strategy approach

New laddering case study

Meet John, age 33, a single parent to Lynn, age 7. After talking about his financial lifecycles, budget and using the life insurance calculator, it was determined he has a $600,000 life insurance need.

John starts with 3 life insurance policies providing the total $600,000 of life insurance he needs.	At year 15, John steps down his life insurance coverage as he no longer needs to provide child support	At year 30, with more assets and less financial obligations, John only keeps enough life insurance coverage to meet final expenses.
Term (15-year level term): $300,000 death benefit
Term (30-year level term): $250,000 death benefit	Term (30-year level term): $250,000 death benefit
Universal Life insurance: $50,000 death benefit	Universal Life insurance: $50,000 death benefit	Universal Life insurance: $50,000 death benefit
$600,000 total death benefit	$300,000 total death benefit	$50,000 total death benefit

John has more comprehensive coverage with future flexibility

Term conversion

Realize the potential of a term life insurance policy.

Now is a good time to review your clients’ existing life insurance coverage and talk to them about converting their MassMutual term policy to permanent coverage*. Highlighted below are some of the possibilities:

Term can convert to:

Whole Life

The MassMutual Whole Life insurance portfolio can help clients with their long-term insurance protection and accumulation goals.

Apex VUL

Apex VUL can provide your clients with the opportunity to accumulate assets for retirement with a wide variety of investment options.

Survivorship

MassMutual Survivorship Whole Life policies insure two people and pay the death benefit at the second death.

*Not available on policies with the LTC Rider.

Benefits of converting may include:

Protection for life: Converting to a permanent life insurance policy will ensure that your client’s beneficiaries will receive a death benefit no matter how long they live, as long as premiums are paid.
Cash value: Whole life insurance also provides access to cash values that are guaranteed to increase each year.³
Account value: Apex VUL provides tax-advantaged access to account values through withdrawals and policy loans.³
An easy, streamlined process to convert.
The flexibility to convert a portion or all of your term coverage.
No medical information required.

Learn more:

New Sales: Life: Term conversions
This page provides a single point for all topics related to sales, service, and marketing of the specific value of term conversion to a MassMutual permanent life insurance policy

Term-to-Perm client call talking points (PDF)
Here are some ideas to help you structure a call with your clients about the valuable conversion benefit included with their term coverage

MassMutual Term - Help protect the financial security of your family (PDF)

Advisor term conversation email template for general agents

Competitive advantages to Term

³ Distributions under a whole life (WL) policy, including cash dividends and partial/full surrenders, and withdrawals from a variable universal life insurance (VUL) policy, are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or withdrawals/distributions are taxable to the extent of gain and are subject to a 10% tax penalty if the policyowner is under age 59½.

Access to WL cash values or VUL account values through borrowing, WL partial surrenders or VUL withdrawals, will reduce the policy’s cash/account value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured. RMDs not applicable to life Insurance.

Additional Resources

Calculator (How much life insurance do I need?)

MassMutual Term Portfolio at a glance (PDF)

MassMutual VantageTerm options to enhance your coverage (PDF)

Additional life sales campaigns:

Taxation
Executive Bonus Arrangements
Term life policy solutions
MassMutual Dividends
Gift of a Lifetime

FOR FINANCIAL PROFESSIONALS. NOT FOR USE WITH THE PUBLIC.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its subsidiaries, employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Guarantees are based on the claims-paying ability of the issuing company and do not apply to the investment performance, or the safety of amounts held in the variable investments.

The products and/or certain features may not be available in all states. State variations will apply.

Life insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual) and its subsidiaries, C.M. Life Insurance Company (C. M. Life) and MML Bay State Life Insurance Company (MML Bay State), Springfield, MA 01111-0001. C.M. Life and MML Bay State are non-admitted in New York.

Variable universal life products are sold by prospectus. Before purchasing a variable life insurance policy, investors should carefully consider the investment objectives, risks, charges and expenses of the variable life insurance policy and its underlying investment choices. For this and other information obtain the prospectuses for the variable life insurance policy and the prospectuses (or summary prospectuses, if available) for its underlying investment choices from your registered representative. Please read the prospectuses carefully before investing or sending money.

To offer or sell MassMutual and subsidiary company variable products, producers must be a registered representative of MML Investors Services, LLC (MMLIS), Member SIPC® (www.SIPC.org), or a broker-dealer that has a selling agreement with MML Strategic Distributors, LLC (MSD). MMLIS and MSD are subsidiaries of Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001, Members FINRA (www.FINRA.org).

Principle Underwriters:
MML Investor Services
MML Strategic Distributors, LLC.