December 2, 2021
Ask the Expert: What Is the Bi-Weekly Benefit Plan?
Do you own a home? Or maybe you’re in the market to buy a new one?
BetterLife’s Bi-Weekly Benefit Plan is a collaboration of a universal life insurance policy and mortgage payment plan that offers homeowners an opportunity to protect their loved ones, pay off their mortgage early, and save money in the process. The plan works like this: instead of paying your entire mortgage once each month, you make half mortgage payments every two weeks. By paying on a bi-weekly basis, you end up making two additional half-payments each year, which help fund your flexible universal life insurance policy.
One of the big benefits of universal life insurance is it has cash value, which can grow over time if you pay enough in premiums. Many people choose to let their cash value grow and then use the funds to pay off their mortgage several years early. Or, if life happens and unexpected expenses come up, you can use that cash value like an emergency fund and borrow from it.* Additionally, the policy’s income tax-free** death benefit can help your loved ones pay your mortgage and other expenses if something happens to you.
To answer a few commonly asked questions, we brought in some of our resident experts.
Kent Stadler, FICF | Agency Manager, Wisconsin River Agency
Kent has served as the Agency Manager at the Wisconsin River Agency since 2005, and has been in the insurance industry for almost 30 years. He’s incredibly passionate about providing honest and transparent guidance on the importance of life insurance to agents and members. Kent lives in Wausau, WI with his wife and son.
Jane Szmanda Zeller, FIC | Career Agent, Wisconsin River Agency
Jane joined BetterLife as an insurance agent in 2010. In her “past life” she taught art, owned a business, and was a national advocate for domestic violence. She’s always believed in the power of service and loves that life insurance allows her to continuously find new ways to help others. She resides in Antigo, WI and has two adult children.
Eric Garland, FIC | Sales Training Specialist
Eric started at BetterLife in 2004 in the sales and marketing department, and while he’s held different roles over the years, he now serves as our Sales Training Specialist. He’s been in the insurance industry for 35+ years. He and his wife Trudy reside in Paddock Lake, WI.
Q&A
How exactly does the Bi-Weekly Benefit Plan allow me to pay off my mortgage early?
Jane says, “The extra payments you make throughout the year go towards funding your universal life insurance policy. With this plan, cash accumulates over time; your mortgage can be paid off early when the cash value in your policy equals or exceeds the amount you have remaining on your mortgage.”
Kent adds, “Often times, you can pay off your mortgage between four and seven years early, which can save you thousands of dollars in interest. However, keep in mind that if you use all of your cash value to pay off your mortgage, your life insurance coverage will likely terminate.”
What’s the catch?
Kent says, “Well there are really two catches.
- This is a life insurance policy so you have to be insurable in order to be approved.
- Depending on your age and health, which will determine your life insurance premium, you may have to pay more than half of your mortgage bi-weekly.”
Will I have to purchase this policy at the beginning of my mortgage?
Jane says, “Not at all! You can enter into this bi-weekly agreement after your mortgage has started.”
What if I move? Or have to sell my home and no longer have a mortgage?
Eric says, “Great questions! This plan is flexible and portable, so it moves with you. If you move, we will add your new mortgage to your policy and you’ll get to keep your cash value. If you fall on hard times and have to sell your home, you can still keep your life insurance policy, we’ll just stop withdrawing your mortgage from your account.”
Learn more about our Bi-Weekly Benefit Plan here. Or, schedule an in-person, phone, or virtual appointment with one of our agents by clicking here.
*Cash values can be accessed through loans and/or withdrawals, but these will reduce the death benefit. In addition, withdrawals from some policies may be subject to surrender charges and could have a permanent effect of the cash value and death benefit. **According to current tax laws, IRC Sections 101 & 7702.