Variable Life Insurance: Maximum Payout Amount?
Your career has been quite lucrative and because of this, your family has become accustomed to a certain quality of life. If you want to ensure that the level is maintained even after your passing, insure! The maximum payout amounts for variable life insurance is quite large, and any beneficiary worth their weight in gold can manage to live the rest of their lives on the death benefit you leave behind.
In the days before the new century was ushered in, the standard rule insurance underwriters used to calculate the payout amount on a variable life policy was 10 times the annual salary of the policyholder. According to MetLife, even in those times the average policy really only equaled about 2.5 times their annual income. However, that was then and this is now.
As somewhat of a marketing strategy, in 2004 insurance giants MetLife and Prudential Financial (now Wachovia) raised the limit on how much they were willing to provide in a maximum payout amount for variable life insurance policyholders. At that time, they both raised the bar to 30 years income, meaning that a 30-year-old earning $100,000 annually could choose a variable life insurance policy with a $3,000,000 death benefit payout. Since then, based on your financial situation, it could possibly be more.
It is important to realize that for your beneficiaries to reap the rewards of your hard work, it will cost you substantial amounts of money in the form of policy premiums. Permanent life insurance policies of any kind are commonly more expensive than term life insurance. The price difference between the two policies can be huge.
While it is great to know that a sizable maximum payout for a variable life insurance policy is out there, it may not be necessary for your needs. Make sure to decide on what kind of a target benefit payout you want in order to determine what your monthly premium payments should be.