Many clients asked whether it would be better to pay "premiums for the whole life" or choose the limited premium which is "pay premium over a number of years" and then enjoy life-long coverage.
If we compare the premiums for both such plans on the same assured amount, we can easily see that we will pay more if we have chosen the former. So limited premium looks more attractive at this moment. However, for the same assured amount, the limited premium plan requires a much higher premium upfront than one which requires to pay whole life.
Why is this so?
Well, we can easily imagine that today's $1 is never of the same value ten years later. So today's $1000 is usually worth lesser ten years later. Then maybe it is better to choose a plan which requires to pay premium for whole life, since we will be using "cheaper" money to pay during the later years.
What the above showed is "time value of money".
There are plenty of discussions on the pros and cons on limited premium vs whole life. I shall probably go into them later.
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