Limited Pay Pros and Cons

Maybe so, maybe not-Hearkening back to NJ's response above.

No, NJHealthBroker was talking about if a 10 pay makes sense or not. Walthammy was complaining about compensation ending and having to continue to service the policy.

I agree with NJ, sometimes a 10 pay makes sense and sometimes it doesn't. It just depends on the client's objectives and budget. However, Walthammy is completely wrong. Once you go that route, it is silly to complain about renewals ending in 10 years for all the reasons I gave.
 
Very short sighted...

Guess what happens in 10 years? They no longer have to pay a premium, but they are use to doing so. So that is premium dollars that can be used for something else, plus they have seen the insurance work. Also, if you did a good job over the years you should have written more business and gotten referrals. Additionally, if a 10 pay was the right option, then you did the right thing for your client.

Finally, most captive agents won't be there in 10 years anyway, so why should a new agent worry about it?

And let me add, exactly how much service does a paid up life policy really need? Maybe a beneficiary or address change form once in a blue moon??

Happy I read forward before answering. As an agent that services what he sells what you posted is spot on. The true renewals are earned in servicing your book and writing new business.
 
Like AboutThatLife stated, a Whole Life till Age 100 will allow you to purchase more death benefit for less money. The limited pay policies will accumulate cash value quicker than a traditional policy.

How liquid an asset is cash value in an insurance policy? -- Particularly if the death benefit of the policy is needed?

It seems like it would be a better planning practice to separate death benefit and other investment return in two buckets.
 
How liquid is life insurance cash value? You can generally get a check sent to you in about 2 weeks. It's very liquid, but not as convenient as a credit card or bank savings.

Accelerated living benefits are typically subject to a medical report and the insurance company's estimate of life expectancy of the insured.

Keep searching the forum for how you can use life insurance in wealth building and asset preservation strategies and comparing them to "buy term and invest the difference".
 
How liquid an asset is cash value in an insurance policy? -- Particularly if the death benefit of the policy is needed?

It seems like it would be a better planning practice to separate death benefit and other investment return in two buckets.

It's liquid enough that Medicaid considers it a countable asset just as though it was money in a checking or savings account.

With many companies a loan against the cash values will be in their bank account in 2 or 3 days.
 
Thanks for all the responses you guys have really educated me a lot , I still have a few questions , someone said the limited pay will not be best suited because they can get more coverage for the same amount of money with a traditional policy, but as I'm quoting policies I'm not finding that much of a difference in coverage . Also I'm not captive I'm under a imo, my main goal is to do what's best for the client a lot of my clients are lower income people that want some coverage but can't spend a lot of money , that's why I thought limited pay would be a great idea 20$ a month for 10-20 years and be done with it , am I looking at this correctly?
 
Thanks for all the responses you guys have really educated me a lot , I still have a few questions , someone said the limited pay will not be best suited because they can get more coverage for the same amount of money with a traditional policy, but as I'm quoting policies I'm not finding that much of a difference in coverage . Also I'm not captive I'm under a imo, my main goal is to do what's best for the client a lot of my clients are lower income people that want some coverage but can't spend a lot of money , that's why I thought limited pay would be a great idea 20$ a month for 10-20 years and be done with it , am I looking at this correctly?


I just ran some #'s for a 50 old male nonsmoker.

Sentinel Security $10K 20 Pay $34.97. For $35.14 he can get $13K.

Settlers Life $10K 20 Pay $35.55. For $37.02 he can get $13K.

They can get more coverage NOW. They might not even be alive in 20 years.
 
I just ran some #'s for a 50 old male nonsmoker.

Sentinel Security $10K 20 Pay $34.97. For $35.14 he can get $13K.

Settlers Life $10K 20 Pay $35.55. For $37.02 he can get $13K.

They can get more coverage NOW. They might not even be alive in 20 years.
Thanks I should have mentioned my client is 34 years old
 

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