By Chuck Bentley

I think life insurance is a great idea and it is especially important for families to have adequate coverage.  I did a little research on how to save money on life insurance and came across an option that I did not know existed.

Some insurance providers allow you to add a rider to your life insurance policy that can save you 5 percent all the way to 40 percent on your premium! This rider allows the insured to spread the death benefit out as a payment to the beneficiary over a period of years instead of a lump sum payment. For example, a policy with a $500,000 death benefit could be structured so that the benefit to the beneficiary pays out $50,000 a year for 10 years instead of a $500,000 lump sum.

This is a great option if:

1.  You desire a lower premium and

2.  You are okay with your beneficiary(ies) receiving payments over a set number of years.

One example of when this would be a great option is for a younger beneficiary, such as a son or daughter in college. Instead of your child receiving a lump sum that could easily be squandered, you set the payment over 10 years. Your son or daughter might blow through the money the first year or two, but they will quickly learn that using the money in a more prudent manner is the best way to go.

Proverbs 2:21 warns us: “An inheritance gained hastily in the beginning will not be blessed in the end.” A lump sum can be too much to handle, and it may better serve the needs of your family to have a long-term payout. I am going to contact my insurance company and ask about this option to see how much it can save us in the premiums we are paying.

Originally posted 4/8/2015.