Life Insurance customers usually buy life insurance in order to insure that those left behind specially those who cannot fend for themselves such as young ones are taken care of in their absence. One main concern is the lump sum payments could be spent easily and the beneficiary might be left without the protection it was intended.
Life insurance companies have introduced a new option for consumers to opt into an installment payments option of the benefits. This plan is called: installment payout life insurance. This is a new option that allows the insured to choose a payment option for the proceeds so the whole money does not get paid all at once. Policyholders can select among many options the traditional lump sum distribution, the new payment plan or a combination of both. Minnesota Life one of the first life insurance companies to introduce the payment payout option provides a range of 10 to 30 years for the payouts as well as a monthly or annual payment option.
Installment payments are similar to getting a paycheck and that is really the goal of a policyholder to provide for people left behind until they can get by without him/her. Of course the side benefit of a installment payout option is perhaps a lower premiums for the insurance. So you can save money or actually you might be able to buy higher level of life insurance. Discount on payment option insurance plans could be as much as 20%.
Another benefit is fighting inflation. So if you choose an installment payment the insurance company will have to pay interest on the remaining unpaid balance, so each year there will be an added bonus to the payments. The beneficiary will probably be liable for taxes on the interest however the padding could really help fight inflation.
