Jumping Jack Life Insurance

If you’re looking for a way to help your loved ones in case you pass away, then you may want to look into a type of life insurance known as “jumping jack life insurance.” This is different from the more common forms of life insurance because it doesn’t require that you be the primary beneficiary on your policy. It also allows you to name additional beneficiaries with no premium cost. Read on to learn more about this unconventional option and how it can benefit you and your loved ones.

What is “Jumping Jack” Life Insurance?

Jumping jack, also known as “secondary,” “foreign,” or “extra” life insurance, is a type of life insurance in which you opt to receive a cash settlement upon the death of the insured rather than the death benefit. The named beneficiary of the policy doesn’t receive the death benefit, but instead receives a cash settlement.

This type of insurance is often used when the policyholder already has an existing life insurance policy. You may have a whole slew of additional family members who you’d like to help financially if you were to die, and a secondary life insurance policy can be the solution you’re looking for.

How Jumping Jack Life Insurance Works

Let’s say you have $500,000 in a $1 million, five-year, single-premium, whole-of-life policy. If you die in that first year, the insurance company will pay the full $1 million. But during the five years, the insured person can cash the policy at any time without paying a dime. You can cash the $500,000 at any time and pay the $500,000. Now let’s say you die in year four.

Your loved one simply cashes the policy and gets $400,000, which they can then take tax-free. The remaining $200,000 sits and grows tax-free until the fifth year. At that point, the full $1 million is paid out again.

This is the basic gist of jumping jack. More often than not, it’s used as a secondary life insurance policy. With this specific policy, the loved one simply makes a payment if the policyholder dies.

This could come in handy for many reasons, such as say if you have a large family and you die first, or if you have a large family and you have other financial obligations that you would like them to take care of.

When Should You Buy Jumping Jack Life Insurance?

Jumping Jack is typically purchased at the same time as a standard whole-of-life policy, but the timing may vary based on your own situation. If you have many family members who would be financially devastated if you died, it may be wise to purchase this type of insurance as early as you can. If you have only a few family members who would benefit, you may want to wait until after your own death to buy it.

There are a few variables that you’ll want to keep in mind when deciding when to buy jumping jack life insurance. First, you’ll want to think about how many additional family members you want to help financially if you were to die. Next, you’ll want to think about how close to death you are.

The closer you are to death, the more likely you are to buy it. Finally, you’ll want to think about your financial situation. If you have too much in savings and not enough to live on in case of a sudden death, then it may not be worth it to buy jumping jack life insurance.

Why Is Jumping Jack Life Insurance Uncommon?

As you can see, jumping jack life insurance is a very flexible way to help your loved ones financially in case you die. And while it’s certainly not a new idea, it’s uncommon because most people don’t know about it. That means that the insurance companies rarely offer it. With so few customers who know about the option, the cost of setting up the business model is high and the profit is low. And as a result, only a handful of companies offer this type of life insurance.

Other Benefits of Jumping Jack Life Insurance

• No Need for Trust – If you have a large extended family and you trust them all, then a life insurance payout is all they’d have if you died. But if you have to trust a stranger before you die, it could be difficult to do so. Jumping jack life insurance helps to eliminate this problem. You simply name a beneficiary and that’s it. You don’t have to worry about trusting someone. You simply have their money if they die.
• No Probate – When you own a traditional life insurance policy, the death benefit goes to the probate court. The court has to decide how to distribute the money according to state law. This could take a while and it’s an extra expense for everyone involved. Jumping jack life insurance solves this problem as well. No one has to know where the money is and no one has to take care of its distribution.
• No Waiting Periods – Another thing that you’ll have to wait for with a traditional life insurance policy is a waiting period. With a traditional policy, you’ll have to wait five to 10 years before you can buy a new policy. With jumping jack life insurance, you can immediately buy another policy as soon as your first one is paid out.

Disadvantages of Jumping Jack Life Insurance

• High Costs – One thing to keep in mind with jumping jack life insurance is that the costs are much higher. The price of the policy is typically 10-15% higher than it would be with a standard form of life insurance.
• No Guarantee of Death – Some people believe that jumping jack life insurance is risky because if you don’t jump off a cliff you could survive, you could jump off the cliff and you could die from a heart attack. But the reality is that there is no real way to know if you will die from a heart attack or if you will survive a jump off a cliff.

Who Can Benefit From Jumping Jack Life Insurance?

Jumping jack life insurance is best for people who have many family members who would benefit from a large death benefit. If you have children or grandchildren who would receive a large amount of money if you died and they have no other resources, then jumping jack life insurance can help them.

If you have many family members who live far away and don’t have the resources to help them if you died, then jumping jack life insurance can help you help them.

Jumping jack life insurance can be beneficial for people of all walks of life. It’s truly a flexible option that can benefit anyone who needs help with a large financial burden.

The pros and cons of Jumping Jack Life Insurance

Pros of Jumping Jack Life Insurance – No Death Benefit – One of the major benefits of jumping jack life insurance is that it doesn’t provide any death benefit. That means that no one gets paid out when you die. This is a huge benefit because it can help your loved ones financially without taking an additional risk. Cons of Jumping Jack Life Insurance – Higher Costs – One con of jumping jack life insurance is that it has a much higher cost than standard forms of life insurance. – No Guarantee of Death – Another con of jumping jack life insurance is that it has no real guarantee that the person will die from a jump off a cliff or from a heart attack. There is no real way to know if this will happen.

How to Buy Jumping Jack Life Insurance

There are two ways to go about buying jumping jack life insurance. The first is to go through an insurance agent. The second is to do it yourself. If you want to go through an agent, they will typically charge a fee, which could range from 1.5-2% of the amount of the policy. If you decide to go through an agent, they