How Much Insurance Do You Need? Why Conventional Wisdom Is Wrong Wall Street Journal (04/10/02) Vol. 16, No. 4 p.D1; Clements, Jonathan
A hypothetical husband and wife, both aged 50, could be paying annual premiums of $3,200 and $2,500, respectively, for $300,000 of universal life insurance with an investment account attached, which after a decade could have accumulated $56,000 in cash value. If they want to reduce their premiums, they could purchase 10-year level-premium term insurance instead. However, to avoid losing the tax-deferred growth, and depending on their health, the two could retain the life policies but lower their combined premiums until their children are out of college, when they could then lower the death benefit, and the savings could go toward retirement.