CASE STUDY: Right-Sizing Life Insurance in the Final Stretch Before Retirement
Ben and Sara are approaching retirement. Ben, 63, is a physician managing several ER centers and serving as a medical expert witness. Sara, a lifelong homemaker, now enjoys helping with the grandkids. Together, they've built a comfortable life—but now face a key financial question: How much life insurance is enough?
The Challenge
Ben currently carries $7M in life insurance—mostly term policies, with one whole life policy inside his defined benefit plan. However, his coverage begins to phase out soon:
- $2M ends at age 65
- $1M at age 67
- Leaving $4M at 69 and just $2M by age 76
He asked, “Should we add another $2M in term to keep $5M in place into my 70s?”
The Approach
Instead of buying more insurance, our strategy focuses on flexibility and building liquid assets. A $2M 10-year term would cost nearly $800/month—money that could instead be directed toward:
- Paying down debt
- Building a brokerage account
- Saving $200K in cash reserves
They don’t need more insurance—they need a smart glidepath into retirement.
Looking Back, Looking Ahead
If we had started 10 years ago, we might have used overfunded indexed universal life (IUL) policies for tax-advantaged growth and permanent coverage. But today, we're building their nest egg through other means.
The Takeaway
If you're wondering how to balance term and permanent insurance—or whether you even need more coverage at all—let’s talk. The right plan can provide peace of mind and flexibility for the future.
—Peyton