The 10-pay life insurance policy is getting more and more popular every day. What is a 10-pay life insurance policy anyway?
How does this type of life insurance work?…
Ten-payment life insurance is a whole-life policy in which all the premiums would be required to be paid in 10 years.
This is what is sometimes referred to as a limited payment life insurance policy…in this case premiums are limited for 10 years.
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10 Pay Life Insurance
Ten-payment life insurance is a whole-life policy in which all the premiums would be required to be paid in 10 years. This is what is sometimes referred to as a limited payment life insurance policy…in this case premiums are limited for 10 years.
One of the advantages of owning this type of insurance is that you pay for 10 years and never have to pay another premium. The policy remains in force.
The death benefit remains level for the duration of the policy and is paid to your beneficiary when you die. This can be paid in one lump sum or in the form of a monthly income.
Some people don’t like to think about paying premiums and as a result, they may find a limited-pay life insurance policy to their liking.
As you may appreciate the premiums for this policy can be pretty high. What the insurance company is doing, in this case, is packing premiums in 10 years that would normally be paid every year for as long as you live.
If you, however, are fortunate enough to buy your 10-pay life insurance policy from a company that very efficiently keeps their costs down while at the same time showing a good return on investment you would receive what is called a dividend which among other options can be used to reduce your premiums.
Dividends are not guaranteed. All in all, it could work out pretty well for you.
- Policy Riders
Like most life insurance policies you may add certain riders to your policy. You could add the waiver of the premium rider to your policy. If you should become disabled the life insurance company will waive your premiums for as long as your disability lasts.
You must be disabled for at least 6 months to qualify for payment with most companies…and you don’t owe the life insurance anything for the premiums they waived during your disability. Whenever you go back to work you would pick up your premium payments again.
Most life insurance companies also offer the accidental death benefit rider. If you add this rider to your 10-pay life insurance policy and you should die in an accident the life insurance company will pay twice the basic death benefit to your beneficiary.
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