Go Down With It?

Ryan asks Dave why he has a higher opinion of term life insurance over decreasing life insurance.

QUESTION: Ryan knows that Dave plugs 20-year term life insurance. He wants to know why Dave says to get level term instead of a policy that goes down in coverage, along with the premiums. Dave thinks this is an excellent question.

ANSWER: The product that most theoretically goes with what I teach is decreasing term insurance. The problem is that in the marketplace, it’s no cheaper. You can buy 20-year term for the same as decreasing term. There’s not really any difference between that and level term.

A 30-year-old can buy in 20-year level term insurance for about $10 a month. If he gets a decreasing term for $9 a month, why would he want to do that? Term insurance is dirt cheap because of the competition. Term life insurance is one of the best buys out there.