What is 7 Pay Premium Life Insurance? 7-Pay Life Insurance is a type of Limited Pay Life Insurance (typically Whole Life Insurance) that requires payments over 7 annual installments. Seven-Pay Life Insurance can be used as an additional source of income for the family or to help cover monthly expenses in the event of your death.
What Is A 7 Pay Life Insurance
A 7 Pay Life Insurance Policy is designed for people who are looking for limited level premiums with cash value growth and permanent death benefit protection. You pay 7 level annual premiums, but the death benefit is guaranteed for your lifetime. This can be an effective way to make sure your premiums end by retirement age.
7 Pay Life Insurance Benefits
- Guaranteed Level Premiums: After 7 level yearly premium payments, the insurance is paid up.
- 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. To help pay for a big purchase, add to your retirement income, or simply provide in times of need, you can take advantage of policy loans and withdrawals.
- Policy Dividends: A dividend may be paid on your 7 Pay Life Insurance Policy.
- Living Benefits: A portion of the death benefit may be used to pay for medical expenses in the event you have a specified medical condition, terminal illness, or a chronic illness.
You Can Use Your IRA Money
There are 7 Pay Life Insurance policies designed for seniors, up to age 80, that will accept funds from an IRA. The owners will convert the taxable retirement plan into a tax-free death benefit on Day 1. These policies consist of a single-premium life annuity (SPIA) and a 7-pay hybrid policy. The retiree transfers the funds into the hybrid policy without a taxable event. The policy then distributes money from the IRA (via the SPIA) into the 7 pay life insurance policy over 7 years. The retiree reports the taxable distribution each year for 7 years.
7 Pay Life Insurance Quotes
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