Alternative to Limited Pay Whole Life Insurance

Alternative to Limited Pay Whole Life Insurance

There is no substitute for life insurance of some type if an individual desires to provide an immediate estate upon his or her death. All types of life insurance policies can provide income tax-free cash upon death. The unique features of limited pay life insurance are its predictable total premium outlay and accelerated tax-favored cash […]

Tax Implications of Limited Pay Whole Life Insurance

Tax Implications of Limited Pay Whole Life Insurance

Non-MEC Policies Limited pay policies that are not classified as Modified Endowment Contracts (MECs) are taxed in the same manner as ordinary level premium whole life insurance. In general, death benefits are subject to the same income, estate, gift, and generation-skipping transfer taxation rules as all other types of life insurance policies.  In summary, life […]

Advantages of Limited Pay Whole Life Insurance

Advantages of Limited Pay Whole Life Insurance

In addition to all the advantages attributable to life insurance in general, and whole life insurance in particular, limited pay policies have three distinct advantages: Forecasting the total dollar outlay for limited pay policy coverage is easier than for ordinary level premium whole life insurance. Because premiums on ordinary life continue throughout the insured’s lifetime, […]

4 Reasons to Consider Limited Pay Whole Life Insurance

4 Reasons to Consider Limited Pay Whole Life Insurance

Prospective insureds may want to consider limited pay policies in any circumstance where they desire whole life coverage and the policy owner has the financial resources to pay the higher premiums necessary for less than the full term of the coverage. Limited pay policies are generally not well suited to persons whose need for coverage […]

An Introduction to Limited Pay Whole Life Insurance

An Introduction to Limited Pay Whole Life Insurance

Whole life insurance, as the name implies, is designed to provide protection over the insured’s entire lifetime. Although coverage continues throughout life, insurers offer policies that allow the owner to pay for the coverage over virtually any duration. At one extreme is the ordinary level premium whole life policy where the owner pays level premiums […]