LIMITED PAY WHOLE LIFE
Higher Premiums Contributions to Build Cash Value Faster
What is Limited Pay Whole Life Insurance?
Limited Pay Whole Life Insurance is designed to accept higher premiums during the early years of the contract allowing the policy’s cash value to grow faster which also reduces the total premiums needed over the life of the policy for it to endow at age 100 (or 121.)
Who Buys Limited Pay Whole Life Insurance?
People who buy limited pay whole life insurance want to leverage some death benefit protection with the primary goal of accumulating cash value in a tax-advantaged and protected environment. They typically have the assets available and transfer their equity from less efficient accounts to the cash value of the limited pay life insurance policy over time although some high earners will buy limited pay whole life with excess earnings.
Because a limited pay whole life insurance policy accepts more premium contributions than straight whole life insurance, the death benefit per dollar of premium is significantly less. Therefore, some individuals will couple a term life insurance policy with a limited pay life insurance policy to meet their short-term life insurance needs, long-term life insurance needs and cash accumulation goals.
Alternative to Limited Pay Whole Life Insurance:
Like all whole life insurance, limited pay life insurance requires the policyowner to pay premiums when due. For people who want to own whole life insurance and accelerate their cash value accumulation but are worried about the additional premium commitments when compared to straight whole life, Decision Tree Financial can help you design a policy that meets your needs.
Trust Decision Tree Financial
Understanding why one would purchase a limited pay whole life insurance, which requires significantly more than term life insurance, is difficult to understand without a comprehensive financial plan. Decision Tree Financials’ Financial Freedom Process can help you understand the best strategies to accomplish all of your financial goals and find out if a limited pay whole life insurance contract is the right product for you to own.
