Single premium life insurance is a type of life insurance coverage where the policyholder pays the premium at the beginning of the policy term and no additional premium is required to pay during the policy term.
The main feature of the single premium life insurance policy is that the policy acquires its cash value faster than the policy for which payments are made regularly. The death benefit is similar like any other life insurance policy and it is depends upon the amount of money that policyholder pay and his age. If the policy holder is young, the life expectancy will be longer and this will give enough time for the premium to grow higher before his death. The death benefit is tax deferred and it is immediately provided to the beneficiary.
There are different versions of single premium life insurance available in the market, which offers wider range of investment and withdrawal options. Whole life and variable life are the most popular plans in a single premium life insurance policies. In a whole life plan, the benefit is depends upon company’s investment experience and current market situation. Variable life plan allows policy holder to choose the investment strategy.
Under this plan, the policy holder retain access to their money for the illness, retirement or any other needs. The loan is also available and generally loan amount is equal to 90% of the policy’s surrender value.
At the time of purchasing, consider the more than one insurance company to get the better benefits for the single premium. The insurance company’s financial situation is especially important to get the better returns on your investment. There are policies that allows additional premiums, it can be a good if the individuals want to deposit additional money later to increase benefit.
To qualify for such a plans little easier then other types of life insurance- medically speaking. This plan is very useful for those people who have a seasonal income and they want hinger return on their investment with life cover.
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