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How Is A Whole Life Policy Different Than A Limited Payment Policy?


When life starts hitting a person, real people become more practical and start to think about their loved ones more than themselves. For this purpose, many look into the option of life insurance even though the policies are mildly confusing and have different criteria to them.

The insurance companies allow their insurers to opt for policies that they find suitable and easy goals to achieve.  Many people who work for average wages look into either a whole life policy or a limited payment policy.

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What is a Whole life policy?

In easy words, this type of policy does not expire. It is a till-death contract on which the beneficiaries can claim the benefits and money. If you opt for the whole life policy, no one can cancel it, other than you and/or you die.

Why opt for it?

This insurance is costly, and the beneficiaries have a large chunk of inheritance. But the insurer cannot see the money. Each annual payment is called the premium, which has to be paid for your entire lifetime.

What is a limited payment policy?

In a limited pay policy, the insurer can see the money in his or her lifetime. In other words, the insurer has the option to pay for a limited year. Such as if they opt for a 10-primum then after paying higher premiums for 10 years or whenever they want to complete the payments. The insurers have the liberty to take out the money for their personal use or even invest it.

Types of Limited payment policy

There are different types of limited payment policies;

  1.     10 premium policy
  2.     30 premium policy
  3.     Till the age of 65.

For the third type, the insurer has to pay until the age of 65. This is more like a retirement plan. But as you come close to the age of 65, your premiums are not that costly.

The difference between the two policies

There is not much difference among these, but it depends on the reasons why you are getting insurance, your age, your salary, beneficiaries, etc. Other than that, the limited pay whole life insurance dilemma can be solved in just a few points.

  1.     A whole life policy is an entire life contract; it is availed after the insurer dies. At the same time, the limited payment policy is for a time frame that can be availed in your life as well.
  2.     The whole life policy is costly, but it is divided on an entire lifetime, which is generally taken as the age of 100. But the limited payment policy is for a short period of time, so the premiums are much more costly.
  3.     A whole life policy can be used as an inheritance for your family or as a retirement plan for you.
  4.     The limited payment plan is like savings account for when you might not have a job or need a chunk instantly.

Which policy to choose

The choice is yours, guided by your insurance officer. They will help you look for the most suitable insurance policy for you and your beneficiaries.


The policy is the help provided by the states and state banks for its civilians to have better outcomes when days become tough. This is mainly a way of taking a burden off of your shoulder, for when you are not around someday, to look out for your loved one.