What Is Limited Payment Life Insurance?

Video Transcript

"Hi, my name is Bill Rae. I'm a License Life Insurance Agent and I have been in the business for well over twenty years. And the question is, "What is limited pay life insurance". Well you know, that's a term I haven't heard too much these days. But generally speaking, limited payment life insurance is a vehicle that used to be very, very popular. Two types of limited pay, quite frankly; there was a time when we had programs such as a ten-pay life or a twenty-pay life or a five-pay life. Simply in our vernacular, all it means is, you agree to make monthly premiums for a certain amount of time such as five years, ten years, fifteen years, twenty years. At the end of that time, you stop making payments but your life insurance stays in force until your death. That's limited pay life. The other example of limited pay life would be how you get the money back. For instance under a contract where you said, "Pay me a hundred dollars a month", for five years certain or ten years certain, that contract would be enforceable whether you live or not. Both are versions of limited pay life. My name is Bill Rae and I'm helping you build wealth."