Single Premium Life Insurance

Single premium life insurance is a policy where the owner of the insurance pays a hefty down payment of cash , in order to get benefits that are payable upon the death of the policy holder. This type of policy allows the insured party to withdraw a cash sum, for emergencies or leave it to build on investments for the beneficiaries of the policy in the future.

Single Premium Life Insurance Risk And Reward

One of the good things about a single premium life insurance policy is that the cash builds up fast since the policy has been fully funded usually with a lump sum of money invested at the onset of the policy. Determining the size of the benefit upon death will depend on the cash sum that’s been invested, and the age of the insured as well as their health. A young person may have longer expectancy for life while an older person is considered a risk. Another factor is what you put into the policy as far as cash is concerned.

Something to consider is unexpected financial issues that can hit you in your older years. The need to understand long-term insurance for independent or nursing care is a difficult predicament for both you and any children who may have to help provide care.

Some types of single premium life insurance policy allow you to have access that’s tax free. This gives you the chance to make benefits in order to pay for care in the long-term. Having this feature helps aid in the potentially expensive debt of long term care. The remaining amount for beneficiary will pass income-tax free. Of course if there is no need to use the policy then the beneficiary will receive the entire amount upon the death of the policy holder.

Single Premium Life Insurance And Terminal Illness Cover

Another possibility is the terminal illness plan where you can pull what you need in the event that you have twelve months to live or less. Having the peace of mind to get your money in the case of this type of emergency is another great reason to purchase this kind of policy.

Single premium whole life has a fixed interest rate that is based on the insurance agency’s investment as well as the current economic situation. Single premium variable life gives policy holders a menu of professional stock options which are managed by the agents. These can be bonds or a money market account or sub-account which is also at a fixed rate.

Single premium life insurance policies allow you to control the investment, with access to money in emergencies for your retirement and other things. You can always borrow against your policy by getting a loan.

The rule of thumb is you can get about ninety percent of cash surrender value of the policy. It reduces the value of the policy but allows you the option to pay back the loan and re-establish all benefits.

If you have a lump sum of cash that you would like to invest for the benefit of your family or retirement for the future then a single premium life insurance policy may work well for you. These policies can vary widely in costs so be sure to compare the products from several different insurers before choosing a policy that meets your needs.