Single Premium Life Insurance Rates

Get A Single Premium Life Insurance Quote Today!

Get A Single Premium Life Insurance Quote Today!

Life insurance is one way of securing the lives of your loved ones upon your death. Death can happen anytime, no matter what age, gender or health condition you may have. This is why there are different insurance policies that you can choose from, which will suit your needs. Most life insurance are paid monthly, quarterly and yearly. But there is a new type of policy that is becoming more and more popular. This is the single premium life insurance. Instead of multiple payments, a lump of sum is invested once, which will fully cover the policyholder.

Two Types of Single Premium Life Insurance

There are two types of single premium life insurance that you can choose from. The interest rates differ from one policy to another.

  1. Single Premium Whole Life Policy. In this policy, the total amount of insurance is paid in full at once. The interest rate is fixed. It remains the same even when the investments on stocks and bonds fluctuate.
  2. Single Premium Variable Policy. This policy is also paid in full amount at once. However, the interest rate is not fixed. It depends on changing factors like stocks and bonds. The advantage of this one is that if the said factors have high value, the interest rate will also be higher. However, if they have lower value, then the interest rate will also be affected.

Advantage of Single Premium Life Insurance

Single premium life insurance has its own pros and cons. This may be a good insurance option to some but not to others. Take time to weigh its advantages and disadvantages to help decide if this one is for you. Here are some of its advantages.

  • One Time Pay Only. Once you have paid the lump sum for the policy, you will be covered your entire life. This means that you don’t have to worry about paying monthly premiums. No matter what happens, you are protected with its coverage.
  • Higher Benefits. Since the full amount is paid from the start, the interest rate also grows faster. This means that the total death benefits that your family members will receive will be higher compared to the benefits of other types of life insurance.
  • Bigger Cash Value. The cash value, which can be borrowed or withdrawn from the insurance, becomes bigger quickly. The minimum amount of cash value or the time before withdrawal is allowed depends on the insurance company. This will be discussed by the insurance agent with you.
  • Insurance Provision. While other policies only provide the death benefits upon the demise of the policyholder, this may not always be the case on single premium life insurance. In special cases in which the person is diagnosed with a fatal disease and is expected to live within a year or less, the insurance benefits can be released sooner. This may also be the case for those that are under home confinement. The remaining amount not used by the policyholder will be given to the beneficiaries upon demise.

Disadvantage of Single Premium Life Insurance

While single premium life insurance has several advantages, it also comes with disadvantages. Here are some of the down sides of this type of insurance.

  • Large Payment. As mentioned, the total amount of the policy must be paid at once. This may not be a problem to those with huge amount of extra money. However, this could be a challenge to those that may not have lots of cash. The minimum amount that can be invested on this policy is usually $5,000. This is a big amount, which must be paid in order to get this insurance.
  • Charges and Fees for Early Withdrawal. This policy is only a good option if you have money saved to spend for any emergency in the near future. Though withdrawal or borrowing of money can be made from the insurance, there will be huge charges if withdrawal is done before the period specified on the policy.
  • Taxable Withdrawal. Withdrawal from the policy is taxable, unlike other types of insurance. But the death benefits that the beneficiaries will receive would still be tax-free.
  • How to Purchase Single Premium Life Insurance

    If you decided to purchase a single premium life insurance, here are the steps on how to do this.

    1. Search for different policy providers and compare them from each other. Find the one that offers the best minimum policy amount and interest rate. Most of these companies have their own website so it would be easier for you to do your research. Request for a free quote or call them to learn more about their insurance.
    2. Once you found the policy provider where you will get your insurance, decide on the amount that you will invest. You may get the minimum amount or higher if you can afford it. Remember, use only the money that you will need in the near future to maximize its benefits.
    3. Read the policy carefully before paying or signing anything. Submit all the documents needed for the application of the insurance once you’re ready with the purchase. If you need further clarification, make sure to ask the insurance agent to fully understand the details.

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