The compounding effect of NOT paying maximum premiums.

Please click on illustration for larger view.

We can easily see with this illustrative comparison that there is a greater loss, over time, than just the amount of the premium that was not paid in years 4 and 5.

The total premium NOT paid for those two years was $12,524. The difference between the Guaranteed Cash Value of the paid and unpaid rider is $12,665, during that same year. The Guaranteed Death Benefit difference is $42,649.

However, looking into the future we can see the differences become more substantial. $22,656 less on the Guaranteed Cash Value at age 64 but $42,649 is still the same amount of death benefit lost.

On the Non-Guaranteed side of the Death Benefit, the difference is $54,627 translating to an annual loss of growth of $2,875.10 per year  over 19 years or $239.59 a month.

The Non-Guaranteed side of the Cash Value, the difference is $27,726.00 translating to an annual loss of growth of $1,459.26 per year over 19 years or $121.60 per month.

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January 18, 2012 · Jennifer · No Comments
Tags: ,  · Posted in: BANKING with INSURANCE, Cost of PUA non-payment, Life Insurance Premiums, Life Insurance with Living Benefits

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