Looking at Protecting Your Family

With 20 pay life insurance, you make premium payments for 20 years, and then you never have to worry about paying for life-insurance protection again. Paying for life-insurance protection during these, your most productive working years is a great way to get some peace of mind about your family’s financial future. Simply put, permanent life protection means guaranteed coverage for your entire life. Plus, it helps to know that your family’s financial needs, such as mortgage payments, tuition bills, and other expenses will be covered in the event of your death.

With 20 pay life insurance, the premiums you pay build tax-deferred cash value. You can then use the cash value (in the form of an interest-bearing policy loan or cash surrender) to fund a major purchase, save for your retirement, or borrow against it. Just keep in mind that any outstanding loan or loan interest will reduce the policy’s death benefit and cash value. This type of policy may also pay policy dividends. Although not guaranteed, when dividends are paid, you can receive them in cash, use them to pay premiums, purchase more insurance, or keep them in your policy to earn interest, so you have a lot of options.

An ideal solution for many families

Premiums on limited payment life insurance are paid for a limited number of years, but the benefits will last a lifetime. Premiums are payable for 20 years (or you have an option for a 10 whole life pay) depending on the policy selected. Purchasing a policy for your kids or grandkids could be advantageous because the premiums tend to be lower when the person is younger. You can pay premiums monthly, quarterly, semi-annually, or annually. Guaranteed cash value grows tax-deferred.

No matter how large your death benefit, it passes to your beneficiaries and is generally income tax-free, making this an ideal situation for your heirs. They can also avoid having to sell assets or incur debt to cover estate taxes and other expenses. And typically, the sooner you purchase your limited payment life policy, the lower your premiums will be. Talk to a local agent or insurer for details on costs, coverages, and restrictions.