Whole life insurance can be a valuable tool in building your financial portfolio. In addition to paying a death benefit, it also works as an investment account, building cash value over time. However, they can be costly, especially if you are continuing to make payments on a fixed retirement income. Both 10-pay and 20-pay life insurance policies can help with that situation.
Just like with many other types of insurance, you can choose different methods to pay for your whole life insurance policy. Opting to purchase a 10-pay or 20-pay policy is one of those methods. Before deciding if this is the right way to go, you should understand some of the key differences between a traditional payment system vs 10 pay vs 20 pay life insurance policies.
Know How Many Payments You Will Make Upfront
Unlike a traditional whole life insurance policy, with a 10- or 20-pay policy, you make a set number of payments, and then your policy is fully funded. That means you won’t have to worry about premiums any longer. The main difference when comparing the two options is the number of payments you will need to make. As their names imply, one has 10, while the other requires 20.
Whole life insurance can be a good investment in the right situation, and both10- and 20-pay policies make it easy to purchase one. Talk to a knowledgeable agent to see if they might be a good fit for your financial situation.