Second Committment - Premium Level
Once you have decided on the product, then decide whether you want to pay a high, mid-range, or low annual premium.
Low Premium Level:
- Covers the required mortality and expenses offering less benefit of tax-free compounding.
- If the annual premium is low, then you have a "thin transaction" - no cushion in the policy at all.
High Premium Level:
- More premium dollars available to credit at the current interest rate.
- A high annual premium bumps into alternative uses of your money. A mid-range annual premium covers mortality and expenses with enough left over to help build cash values.
Most policyowners choose a mid-range annual premium.
TIP: The higher the annual premium per dollar of initial death benefits the better the potential financial performance of the policy.
Next Step: Choosing the number of years of "out-of-pocket" cost also influences your buying decision.