Our firm has provided many accountants planning ideas and comparisons related to life insurance coverage. CPA’s often like to start the evaluation process by analyzing the cost and benefits of coverage currently provided to members of American Institute of CPA’s. We will now be reviewing the AICPA Level Premium Term Life (LPT), which one of the group term plans offered to members of the AICPA .
AICPA members have two different term life options to consider: Level Premium Term (LPT) and CPA Life. (which was covered in a separate post called CPA Life Review)
AICPA Level Premium Term vs CPA Life
A few similar benefits and a few notable differences with each term plan:
- Both group life plans are offered by Prudential for members to establish up to $2.5 million life insurance coverage.
- The Level Premium Term plan locks your rates for either 10 or 20 years, which differs from the rate increase every 5 years with the CPA Life option.
- LPT policyholders can continue the plan after the initial 10 or 20 year term has ended, but the rates will increase annually and coverage ends at age 95.
- Because of the ability to lock in your rates, the maximum age to apply for coverage is age 65, as opposed to 74 with the CPA Life option.
- You are able to qualify for a preferred health rating with Level Premium Term Life (LPT), assuming you are in excellent health and are also willing to go through the underwriting process with Prudential.
- Level Premium Term policyholders are also eligible for the annual cash refund on premiums paid.
- From the beginning, the AICPA has always paid a non-guaranteed cash refund to it’s policyholders.
- The refund percentage can vary from year to year depending on the impact of the claims experience within the group.
Pro’s to Owning AICPA Level Premium Term (LPT)
- Level Premium Term is ideal for those who have a few health issues
- Convenience of not having to take an exam required for a fully underwritten policy
- Prudential is a highly rated insurance company
Con’s to Owning AICPA Level Premium Term (LPT)
- The cost of Level Premium Term is higher then individual term life
- Must also be a member of AICPA
- The $2.5 million maximum amount on coverage
- The Level Premium Term plan only allows 10 and 20 year coverage periods
- The cash refund is not guaranteed
AICPA Level Premium Term vs Individual Term
AICPA Level Premium Term makes economic sense at younger ages, or if you have any serious health conditions. However, as accountants get older the prices for life insurance are significantly more expensive than open market pricing.
If you are in decent health and over the age of 50, it is cheaper to buy individual coverage outside of the group. In other words, this AICPA Level Premium Term is overcharging you for life insurance for a year then giving a refund.
You may also want to learn more about the two other other AICPA life insurance plans which are covered in great detail before making any decisions. We would also be happy to provide you with a complimentary cost breakdown AICPA life insurance rates by age.
We can easily make cost comparison between Level Premium Term and individual term life coverage. CPA’s who are in decent health can always save money by purchasing an individual policy versus maintaining their group coverage.
Do you already know the prices you are paying for Level Premium Term? Great, you can get started right away. Simply use our life insurance premium calculator using your exact age and face amount required with Instant Life Insurance Quotes. If you have specific questions, do not hesitate to cal us 1-877-249-1358.