• Dividend payments based on current interest rates from the cash value of life insurance are supposed to cover premium payments over time in vanishing insurance policies.

  • These policies usually charge high premiums with few benefits in the early years of their existence.
  • In the late 1970s and 1980s, during a period of high interest rates, there was a boom in premium disappearing policies.
  • A policy of vanishing premiums makes sense in times of high interest rates.