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Graded Premium Life Insurance Basic Features

Cash Value Policies: Graded Premium Life
Description Premiums Cash Value Advantages Disadvantages Uses
Guaranteed at-death proceeds; Guaranteed lifetime benefits Starts low, increases over time — ultimate rate will be higher than comparable Ordinary Life policy Guaranteed build-up (less in early years than Ordinary Life); Participating policies may have build-up beyond amounts guaranteed Forced savings element; Low initial premiums (compared with Ordinary Life); Guaranteed cash values; Income tax advantages Rates higher than term — Cash values build up slower than Ordinary Life; Investment return usually marginal Younger buyers with high needs, low current income (but prospect for future income increases)

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