Learn the Basics About Limited Pay Life Insurance
InLife or Insular Life offers different types of life insurance to cater to your unique needs. One of our offerings is limited payment life insurance, which has a unique structure and benefits from traditional life insurance. Curious about what this type of insurance has to offer?
Keep reading to understand what limited payment life insurance is, how it works, and its benefits and advantages, so you can determine if it’s the right choice for you.
What is Limited Pay Life Insurance?
Limited pay life insurance is a type of whole life insurance that lets policyholders pay premiums over a set number of years rather than throughout their entire life. After the payment period is completed, the policy remains in force for the rest of the insured’s life.
This type of insurance offers permanent life coverage, including health coverage options, lump sum cash coverage for critical illness, hospitalization coverage, and many other benefits that help provide financial stability for policyholders until age 99.
InLife policyholders get all these benefits from the limited pay plan.
How Does Limited Pay Life Insurance Work?
When you purchase a limited pay plan, you pay premiums for 10 years. Payments can be made annually, semi-annually, quarterly, or monthly depending on your preference.
Once the payment period is complete, the policy becomes fully paid, so the policyholder no longer needs to pay premiums. Meanwhile, the policyholder can access accelerated cash payouts and additional health benefits.
How long does the coverage normally remain on a limited pay life policy?
While the payment period in limited-pay life insurance is finite, the coverage lasts for one lifetime. InLife’s Resilience offers coverage up to the age of 99.
Get to Know InLife’s Resilience
Resilience is a limited payment life insurance, with three variants. You may choose from Resilience Critical Illness Extra; Resilience Cancer, Heart Attack and Stroke; Resilience Female Cancers.
All these variants offer the same payment structure and benefits but cover different diseases.
Resilience Critical Illness Extra, the most comprehensive of the three, covers 84 major and 39 minor critical illnesses.
Resilience Cancer, Heart Attack and Stroke is best for those with a high risk of cardiovascular diseases and certain cancers.
Resilience Female Cancers is designed to provide specific coverage for nine kinds of cancers: breast, ovarian, cervical, and endometrial cancer; uterine sarcomas, malignant mixed mullerian tumors, malignant germ cell tumors, fallopian tube cancer and leiomyosarcomas.
For all these types of limited pay life insurance, policyholders can have access to the following benefits:
- Lump sum cash upon diagnosis of critical illness
- Health coverage options
- Cash allowance for hospitalization due to a covered disease
- Late-stage Cancer benefit
- Second coverage for cancer, heart attack, and stroke
- Good health cash rewards
The policyholder retains all the benefits of the policy, including the riders and death benefit without any further financial obligations after the end of their payment period.
Limited Pay Life Insurance Benefits
Besides the comprehensive coverage, getting a limited pay life insurance offers unique benefits for policyholders:
Finite Payment Period
One of the most appealing features of limited payment life insurance is the fixed payment terms. This is particularly advantageous for those who wish to avoid lifelong payments and still enjoy long-term insurance coverage. This feature reduces the burden of maintaining a life insurance and allows for better financial planning like allocating funds to other investments.
Lifetime Coverage
Despite the limited payment period, this type of insurance offers lifetime coverage. This ensures that policyholders can receive financial support for their healthcare needs and their beneficiaries will receive a death benefit when the time comes.
Predictable Premiums
With limited pay life insurance, you’re guaranteed fixed premiums until the end of your payment period. Unlike other health insurance plans where premiums are variable, often increasing as you age, this type of insurance offers predictability, making it easier to manage your finances.
Peace of Mind
Perhaps the most valuable benefit limited pay life insurance offers is peace of mind that lasts for a lifetime. Policyholders can rest assured that they, by extension, their families are financially protected, especially in the event of a dreaded illness.
Limited Pay Life Insurance Cons
While limited payment life insurance offers benefits, it can have some drawbacks for some. Here are some potential cons of purchasing this type of insurance:
Higher Premiums
One of the main drawbacks of limited pay life insurance is its higher premium than traditional life insurance policies. Since premiums are condensed into a shorter payment period — 10 years — payments tend to be higher, though they are fixed. This means the amount you need to allot to your insurance will be consistent for the next decade. This can be a financial burden for those on a tight budget.
Limited Flexibility
This type of insurance tends to offer less flexibility in terms of type of coverage. This can be a disadvantage since your insurance needs may change as you age. This is why it’s important to purchase a limited payment life insurance that offers comprehensive coverage that can accommodate your evolving needs at every stage of life.
Opportunity Cost
Another potential drawback of limited payment life insurance is the potential opportunity cost. Since it requires a higher premium, a substantial amount of money tends to be tied up in the policy over the fixed payment period. To avoid this, it’s important to weigh the opportunity cost when choosing a policy. More importantly, remember that purchasing a life insurance policy is an investment in your health and financial stability.
Secure Your Future with Insular Life
Limited pay life insurance is a smart option for those seeking guaranteed lifetime protection with a defined payment period. However, this type of insurance can have some drawbacks, so it’s important to consider your individual circumstances and needs to find the best choice.5
Luckily, with the right life insurance company in the Philippines, limited pay life insurance is just one of the many insurance options for you to choose from. Consult with a qualified financial advisor to help you determine the best type of life insurance for your goals.
