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Single Premium Life Insurance
Single premium life insurance refers to a single payment to fully pay for the coverage. After that single, large payment you make to the life insurance provider you are fully protected and no longer need to many any more payments. Single premium life insurance assures the death benefit as it is guaranteed until after your passing. Holding a single premium life insurance policy also allows you to receive living benefits. You never know what kinds of unexpected bills and costs may come up when you are older. Living benefits can assist you in case of a major illness and like every life insurance policy will make sure your loved ones are financially covered if you pass away. Single premium life insurance can also assist you in saving money so you can give it to your favorite charity as well. Many people purchase single life insurance coverage when they have a huge extra amount of money available. It could be a gift from an inheritance or a business gain.
There are two major kinds of single premium life insurance coverage. One is Single premium whole life and it gives you a fixed interest rate that the life insurance provider will pay. The life insurance company will take on any risks associated rather than you. The other kind of single premium life insurance coverage is single premium variable life and it allows you to choose between several financial portfolios. You should base your decision on your capability to deal with market alterations, how you are planning to use the cash value of the policy, and the total of all assets in your financial portfolio. Fixed rates of interest allow you to depend upon the growth rate that’s continual. However, with a fixed rate you may miss out on gains should the markets have an increase. Typically the least possible amount you can obtain from the death benefit is figured out when you get your single premium life insurance policy but there’s a way for the death benefit to increase if the account amount increases above a specific amount. Any cash value that you withdraw will be taxed.
There are many benefits of obtaining a single premium life insurance policy. Some of the benefits include: Only one payment and will never have to pay again, You can leave money for your grandchildren and or children, you will have cash values should emergencies happen or you can take a loan against your single premium life insurance plan to get the money you need when you need it, it’s an investment and will grow your money over time, and there is also often an option to use some of the death benefit money towards a terminal illness. You will never again have to worry about a lapse in your life insurance coverage as if you decided on getting a single premium life insurance policy; it’s all paid with one payment.
The payment amount of a single premium life insurance policy and usually ranges between 5,00 to 10,000 dollars based on the life insurance company’s needs and rules and the product you chose.
You will have to get examined by a medical professional before being approved for a single premium life insurance policy and you may have to take additional medical examinations if you decide to place more money into your policy at a later date.
There is also the option of receiving the surrender amount at any point after obtaining a single premium life insurance policy. The surrender amount is what the insurance company agreed on giving you as a pay out if your policy is terminated prior to your passing. You can do this partially or fully depending on your need of cash. However, you will have to pay taxes on the surrender value. Additionally, if you are over 59 and a half years old you will have to pay another 10 percent as a penalty. You can take a loan out on your policy and up to 75 percent of the surrender amount within the first three years of your policy. After that time period, you can take up to 90 percent of the surrender amount. Note that loans can have an annual rate of interest of six percent and loans are also at the mercy of income tax. And again if you are older than 59 and a half, you will have to pay an additional 10 percent in penalty.
You should get several quotes from several different life insurance providers before you make a decision as to what policy is best for you. You can get a quote easily by visiting websites and filling out the forms they provide. You can also call life insurance companies to obtain a quote. All quotes should be free and so getting more information from the market and many life insurance providers that offer the kind of insurance you are needing, will help you make an informed decision.