Historically strong dividend payment records have greatly enhanced policy values. Policy loan interest is at very favorable rates and terms. Premium paying period may be shortened to as little as 10 years or less through dividends - not guaranteed. Dividends may be used to reduce premium outlay or to increase coverage through protection increase options. Automatic Premium Loan feature will keep coverage in force if a premium is missed.
Policies contain annuity options which contain guaranteed payment rates and tax benefits.
Initially, premiums are rather high in order to support the long term guarantees. Neither Death Benefit nor premium may be adjusted to meet changing needs. Inevitably the lack of flexibility leads to multiple contracts. Mortality tables used in calculating premiums are usually less favorable than current mortality tables. Company may not be able to maintain projected dividend schedule if rates of return fall off after policy purchase.