Flexible Premiums for Whole Life Insurance

There are many different ways to pay the premiums on a whole life insurance policy, and each has its advantages and disadvantages. Choosing the right premium payment plan can make the difference between an affordable investment in your future and a financial burden on your family. Here are some of the most popular premium payment options and their advantages.

Single Premium Payment
You can choose to pay the entire amount of your whole life policy up front, in one large payment. This isn’t an option for most people – but if you have a large chunk of change that you want to set aside for your family and your future, making a single payment is probably the cheapest way of buying whole life insurance. Your life insurance policy has an immediate cash value on which you can draw, and the death benefit is fixed. You’ll never have to pay another cent toward the policy.

Limited Payments
One popular method of paying whole life insurance premiums is through limited payments. The cost of your policy is divided over a specified number of years – usually fifteen or twenty. Limited payments are designed to let you pay for your insurance policy when your earnings are at their peak, and end at about the time that your income may be reduced due to retirement. The payment is usually fixed, and is specified in your insurance policy. The cash value of your whole life insurance policy will steadily increase over the years, and the policy remains in force until your death even after you finish making the payments.

Modified Payments
Modified payments are designed for the typical family. The premiums start low and gradually increase over time until they reach a fixed level. This method allows a young family to purchase more insurance than they can afford at the time on the premise that their earning potential will increase over time. It’s an ideal premium payment method for a young couple who are just starting out and want to be sure that their needs are covered.

Continuous Payments
Continuous payments is the most popular method of paying life insurance premiums. With continuous payments, your premium stays the same over the entire life of the policy, and you continue to make payments throughout your life, or until you cash it in. Continuous payments can be less affordable for a young family than modified payments – but the amount paid never changes, unlike modified payments, which will increases throughout the life of the policy.

The method that you choose to pay your premiums is dependent on your own personal circumstances. A life insurance professional can explain all of your options clearly and help you make a decision that is best for you and your family’s needs.