Purpose Of Limited Premium Payment Life Insurance?
Posted October 12, 2009 – 4:40 am in: term life insuranceWhat is the purpose of limited premium payment term life insurance? Is it so that the insurance companies can get hold of your premiums over a shorter period, or does it actually work out cheaper in the longer term for the policyholder? I appreciate that you may chose the premium term to be limited if you are close to retirement, but let’s ignore that case for now.
Tags: Insurance, Life, Limited, Payment, Premium, Purpose
One Comment
When it comes to term insurance I know of nothing that is limited pay. Term insurance is “renting” your insurance and you pay on a monthly, quarterly, or annual basis (It is often cheaper to pay annually.) until the 10-year, 15-year, etc. term is up. After that period the insurance is gone.
Often times limited pay is spoken of when dealing with whole life insurance, or other kinds of permanent insurance, like variable, whole, and universal. I’d run the numbers for your situation, but it should be cheaper, but that doesn’t mean you should do it. Consider the interest you can get on your money in a life insurance policy. For whole life, it’s probably around 3%. For variable life, maybe 8% overtime. My point is this: where do you want your money tied up? If you like the guarantees of whole life insurance and the guaranteed cash values, great, but a CD can offer that same benefit, less the death benefit of many times the cash value of course. Same with the variable insurance, you may get a good return, but you can also get that through mutual funds or stocks. Check out this site, if you want to find the cheapest life insurance just in one minute,
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Here you can get free quotes from different life insurance companies in your area, its the best way to find an afforable life insurance with a reliable company.
Best Wishes,