Third Commitment - Premium Duration
Choosing the number of years of "out-of-pocket" cost also influences your buying decision.
Every policy requires either:
- A fixed annual premium each year; OR
- Money to cover the cost of insurance to life expectancy on a daily, monthly, quarterly or annual basis.
Does the premium come from your pocket or from the policy's cash value? The number and size of the "out-of-pocket" premiums determines the magnitude of the long-term benefit.
TIP: Too few "out-of-pocket" premiums may result in a "thin transaction".
Next Step: The length of time you want the coverage also impacts your decision on the annual premium.