Single Premium Life InsuranceSingle Premium Life Insurance is a type of life insurance in which a lump sum is paid into the life insurance policy in return for a death benefit that is guaranteed to remain paid-up until the insured’s death. Single Premium Life offers a good option when you need life insurance coverage and you may have recently come into a large amount of cash resulting from one of the following: an inheritance, a savings or retirement account, a gift or lottery. Depending on the age of the person to be insured, a one-time (single) premium payment usually secures many times that amount of life insurance protection. Over time the amount of life insurance coverage can increase. A single premium policy is most appropriate if you intent to keep the policy in-force, without withdrawing cash from the life insurance policy. The policy may pay dividends which offer the insured an option to use the dividends to purchase additional coverage, which increases the policy’s face amount and cash value. Also, policy loans may be available to the insured at a fixed or variable rate of interest. Some SPL policies will give you tax-free access to the policy death benefit to pay for long-term care expenses. The death benefit remaining in the life insurance policy will pass income-tax free to your beneficiaries. Your investments will grow tax-deferred inside your single premium life insurance policy. You usually are only taxed on the earnings if you borrow or withdraw money from the policy. Drawbacks to a single premium policy include: a minimum amount required to invest, which is usually $5,000. Also, additional investments into the policy are not allowed. Generally, you should use money you intended to pass onto your heirs, or to help fund a long term goal such as retirement. A single premium life insurance policy usually requires a medical exam to qualify for coverage. Here's how you can compare some of the best life insurance rate quotes from several leading life insurers. Recommended - Net Coverage |