For a 65-year-old non-smoking male, the annual premium required to endow the contract at 6.5% is $20,500. This is $6,192 less than the premium for a joint policy with a joint equal age of 65. If we invest $20,500 at 9% net of taxes, it will be worth $1.8 million in 21.6 years, at the individuals age 87.
In other words, the single male must live 21.6 years in order to equal the insurance plan available to him today. Consequently, a typical single life insurance plan or even a “rated” plan is still a very efficient alternative to cash.
Reproduced from National Underwriter Life & Health/Financial Services Edition, June 24, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.