All Life Insurance Tips

I'm 26. How long would I have to pay premiums on a whole life insurance policy?

Eventually, the dividends of the policy would outweigh the monthly policy cost. In short, how long does it take for the dividend payments to outweigh the cost of the policy?

Public Comments

1. It depends on the policy. Generally speaking, if you put the most amount of money into a policy that the IRS allows then you can max out the policy in just seven years.
2. It depends on how much you pay. If you pay just the minimum premiums, it could be decades before your policy is paid up enough that the dividends would carry you. You'll need to talk to the agent proposing the policy, and ask for an illustration to show how long it would take at the minimun premiums, and how much you'd have to put in, to pay it up sooner.
3. Dividends is a return of excess premiums you and everyone else who paid for their life insurance policy. The company overcharge you and invest it for themselves. To avoid your policy turning into a modified endowment policy, they return the excess premiums and call it a dividend. Also, this dividend is not guaranteed. In general, you will be paying premiums for your whole life. That's why its called a whole life policy. The cash value will grow at a very low rate of return. It will take until you are nearly 100 years old when the cash value is almost the same as the coverage amount.