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Bar News - January 7, 2005

NHBA Insurance Tips: The Sandwich Generation - Getting the Right Balance


This article continues a series of articles on life insurance coverage that began in the last few months. For more information on all types of insurance, visit the NHBA Insurance agency page at

Today’s "Sandwich Generation" has a unique financial burden. Many of today’s families not only have to provide for themselves and their children, but also for their aging parents as well. Where is a family to start when building a financial foundation to meet this challenge? Many people would agree that life insurance is the first step. But faced with the day-to-day reality of paying the bills, how can a young, growing family get the protection they need and manage to fit the cost into their budget? Well, the answer may be a matter of "getting the right balance."

Permanent vs. term insurance?
Why not both?

For decades families have struggled with a classic question: "Should we purchase term insurance or is permanent insurance the better buy?" Term insurance is attractive for its initial lower premiums, while permanent insurance (for example "whole life insurance") offers the benefits of a level, fixed premium and guaranteed cash value accumulation. There’s no simple, easy answer because one kind of insurance is not necessarily "better" than the other, and they are certainly not mutually exclusive. You don’t necessarily have to choose between them. You can have the best of both.

The best of both worlds

Some insurance companies offer products that blend the affordability of term insurance with the cash value accumulation of permanent insurance in one "package". Most companies offer several variations of coverage, such as 30% permanent with 70% term or a 50%-50% mix. This allows the buyer to choose the combination that best suits his/her budget and goals.

Time passes, needs change worlds

The only thing certain in life is change. Over the years, your family may grow, and you’ll want to adjust your plan accordingly. More children mean more responsibility, and you’ll want to be sure that they will be adequately protected. Looking to the future, you’ll want to be prepared to help fund far-reaching goals, such as financing your children’s education, possibly buying a new home, and, eventually supplementing a comfortable retirement. A great advantage of the "package" concept is flexibility. It can change as you change. The term portion of the plan can be converted into value-building permanent insurance. You can convert it all at once or over time.

Your place on the spectrum worlds

You can think of your insurance options as a spectrum. On one end is permanent insurance, with its guaranteed protection and cash value accumulation. On the other end is term insurance, which offers financial protection, a lower initial premium, but without cash value accumulation. In the middle of the spectrum you’ll find the blended plans. After taking a close look at all the features and benefits of each, you may find that striking a balance between permanent and term insurance is the most appropriate place for you on the insurance spectrum.

The NHBA Insurance Agency is now offering life and disability coverage at discounted rates for NHBA members. Contact Sue Morand at the NHBA Insurance Agency at the Bar Center at 224-6942 for information. Information will be mailed to members regarding these offerings early in the New Year.

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