Life Insurance Learning Center - Whole Life Insurance Types
Limited-Payment Life Insurance, Part 3
Limited-Payment Life Insurance: Disadvantages
There are also some disadvantages to the limited-payment life policies. Some of them, we already mentioned. During the period when the premiums are due, they are generally a bit higher than in a straight life policy plan (obviously because there is a shorter duration to pay them than in a straight life policy). The protection component decreases quite a bit more than in a straight life because the savings component increases.
Also, although the policy owner does not pay premiums after the premium paying period is over, he/she does pay in other ways. The interest on the savings component is used to offset the policy and to continue the protection (some of the interest is used). Also, some companies may charge more for the coverage in a limited-payment life insurance plan than in a straight life insurance plan.
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