Contrary to the public understanding, this strategy may be a very expensive way to buy life insurance in the long run. This strategy may create substantial financial losses in the long run that are often overlooked by consumers and the financial advocates that recommend such an insurance strategy. LEAP SYSTEMS, Inc. helps consumers understand that term life premiums and their lost opportunity cost can be very expensive over the life expectancy of any consumer who employs such a strategy. The potential loss of the death benefit of the term life policy may leave the invested difference account vulnerable to income taxes, estate taxes, market declines, and liquidity problems.

Although term life insurance plays an important role in many financial situations, one must consider all of the factors associated with the cost of the premiums over time, the potential loss of the earnings on those premiums, and the ultimate possible loss of the death benefit. If the term life policy has expired and the stock market is perhaps in a downward cycle at the time of the ultimate death, the effects of this strategy can be financially damaging to heirs.