Limited Pay Life Insurance: What You Need to Know (2022)

If you’re like most people, you want to make sure your loved ones are taken care of financially if something happens to you. But what if you can’t afford the high premiums of traditional life insurance? Limited payment life insurance is a great alternative for those who want the peace of mind life insurance provides but don’t want to break the bank. Read on to learn more about how this type of coverage works.

what is limited payment life insurance?

Limited payment life insurance is a type of whole life insurance that allows you to pay the full cost of your coverage up front for a set number of years. You can select limited payment life insurance if you have a whole life policy but want to pay the full cost of your premiums over a set period of time rather than over a lifetime.

Reading: What kind of life insurance

Traditional permanent life insurance premiums are paid throughout a person’s lifetime. When choosing the limited payment whole life option, the length of the payment must be determined at the initial purchase of the policy. premiums are generally paid for the first 10 to 20 years.

You can pay your premiums monthly, quarterly, semi-annually, or annually if you choose to do so over a restricted period of time, usually 10, 15, or 20 years.

There is no option to allow your policy’s cash value growth to pay premiums. instead, they pay the cost of the policy in full over time.

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This payment option could be particularly beneficial for those who purchased permanent life insurance later in life and want to stop funding their policy but still want the cash value.

Sometimes money from a qualified retirement plan, such as an IRA, can be used to fund a limited payment life insurance policy.

examples of limited payment life insurance

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