People who buy limited pay whole life insurance want to leverage some death benefit protection with the primary goal of accumulating cash value in a tax-advantaged and protected environment. They typically have the assets available and transfer their equity from less efficient accounts to the cash value of the limited pay life insurance policy over time, although some high earners will buy limited pay whole life with excess earnings.

Because a limited-pay whole life insurance policy accepts more premium contributions than straight whole life insurance, the death benefit per dollar of premium is significantly lower. Therefore, some individuals will couple a term life insurance policy with a limited-pay life insurance policy to meet their short-term and long-term life insurance needs and cash accumulation goals.

Alternative to Limited Pay Whole Life Insurance:

Like all whole life insurance, limited pay life insurance requires the policyowner to pay premiums when due. For people who want to own whole life insurance and accelerate their cash value accumulation but are worried about the additional premium commitments when compared to straight whole life, Decision Tree Insurance can help you design a policy that meets your needs.