20-Pay Life Insurance

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

20-Pay Life Insurance Calculator

Our 20-pay life insurance calculator helps you determine how much you need to pay each year for a life insurance policy where you only pay for twenty years but get life coverage. You enter details like age, gender, health, and how much coverage you want. It then shows the yearly cost for these twenty years, making planning and comparing rates for buying life insurance easier.

What Is A 20-Pay Life Insurance Policy?

A 20-pay Life Insurance Policy is a limited-pay life insurance policy designed for people looking for limited-level premiums with cash value growth and permanent death benefit protection. You pay 20-level annual premiums, but the death benefit is guaranteed for your lifetime. This can be an effective way to ensure your premiums end by retirement age.

20 Pay Life Insurance Calculator

20-Pay Life Insurance Benefits

  • Guaranteed Level Premiums: The insurance is paid up after 20 yearly premium payments.
  • Guaranteed Lifetime Coverage: Your coverage cannot be discontinued as long as premiums are paid and policy loans do not exceed the entire cash value.
  • Tax-Deferred Cash Value Accumulation: Your insurance plan is set up to accumulate cash value each year on a tax-deferred basis. You can use policy loans and withdrawals to help pay for a big purchase, add to your retirement income, or provide in times of need.
  • Policy Dividends: A dividend may be paid on your 20 Pay Life Insurance Policy.
  • Living Benefits: A portion of the death benefit may be used to pay for medical expenses if you have a medical condition, terminal illness, or chronic illness.
20 Pay Life Insurance

You Can Use Your IRA Money

20-Pay Life Insurance policies are designed for seniors up to age 80 who accept funds from an IRA. The owners will convert the taxable retirement plan into a tax-free death benefit on Day 1. These policies include a single-premium life annuity (SPIA) and a 20-pay hybrid policy. The retiree transfers the funds into the hybrid policy without a taxable event. The policy distributes money from the IRA (via the SPIA) into the 20-pay life insurance policy over 20 years. The retiree reports the taxable distribution each year for 20 years.

20 Pay Life Insurance Benefits

20-Pay Life Insurance Companies (We Recommend)

While 20-pay life insurance is an excellent option for some, it may not be the best choice for everyone. The main advantage of this type of policy is that your premiums are paid in full after 20 years. Therefore, this can be a great way to save money in the long run, as you won’t have to keep paying premiums to keep your policy active. However, the downside is that your premium rates will be higher than if you were to pay for life. As a result, it’s essential to weigh the pros and cons of this type of policy before making a decision.

  • We recommend Lafayette Life for this type of policy.
  • They have an A+ rating with A.M. Best and a strong Comdex score of 96.
  • Plus, they pay dividends.

Disclaimer: We are licensed life insurance agents for Lafayette Life. If you need a quote or want to apply, contact us below. There is no charge for the service. However, we strongly discourage applying without the assistance of an agent because if you apply on your own and get declined coverage, for whatever reason, no other life insurance company will consider you for coverage for approximately two years.

Next Steps

Whether a 20-pay life insurance policy is right depends on your circumstances. This may be a great option to save money in the long run. However, it’s essential to weigh the pros and cons of this type of policy before making a decision. Contact us today for a free quote, and we can help you decide if this is the right choice.

20 Pay Life Insurance Quotes

Feel free to contact us for a 20-pay life insurance quote. The service is free of charge.

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Frequently Asked Questions

Does a 20-pay life have a cash value?

Yes, a 20-pay life insurance policy typically accumulates cash value over time.

Can you cash out a 20-year life insurance policy?

Yes, you can cash out a 20-year life insurance policy with a cash value component. You would receive the accumulated cash value, less any surrender charges.

How Does A 20-Pay Whole Life Insurance Policy Work?

A 20-pay whole life policy is a type of whole life insurance where premiums are paid for 20 years. After this period, no further premiums are due, but the policy remains in force for the insured’s lifetime. It accumulates cash value and offers a death benefit.

When would a 20-pay whole life policy endow?

A 20-pay whole-life policy would endow when the policy reaches its maturity date. This typically occurs when the insured reaches a certain age, such as 100 or 121 years old, depending on the specific policy. At that point, the policyholder receives the accumulated cash value of the policy.

What is the difference between a straight-life policy and a 20-pay whole-life policy?

A straight life policy is a type of life insurance policy that requires premium payments throughout the insured’s entire life, while a 20-pay whole life policy is a policy that only requires premium payments for 20 years. This means that with a 20-pay whole-life policy, the insured will be fully paid up after 20 years and will not be required to make any further premium payments.

What is the penalty for discontinuing a 20-year pay whole life insurance policy after 9 years?

The specific penalty, often referred to as a surrender charge, depends on the terms outlined in your policy. Whole life policies typically have a surrender charge if you cancel within a certain period, which gradually reduces to zero over time. Since you’ve paid into the policy for 9 years, the surrender charge might have decreased but is likely still applicable. Additionally, cancelling your policy can have tax implications, especially if the cash surrender value exceeds the premiums you’ve paid. Consider taking a penalty-free withdrawal or loan before cashing in the annuity.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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