Single-premium life insurance provides an income-tax-free death benefit to your beneficiary, charity, or favorite cause, and is easier to qualify for - medically speaking - than other types of life insurance.

It is a good choice when a lump sum of cash - from a savings or retirement account, an inheritance, an insurance payout, a gift, or even a lottery windfall – is available and life insurance coverage is essential. Depending on the age of the insured, a one-time premium payment may secure several times that amount in coverage immediately. Over time, the amount of protection may increase until it is many times greater than the amount paid into the policy.

Advantages of single-premium life insurance

• 100% income tax-free payment of death benefit to beneficiaries
• An immediate increase in the value of the assets
• Cash Values and Death Benefit are guaranteed forever
• Cash accumulation is not subject to market volatility
• Cash value grows on a tax-deferred basis
• Benefits are not subject to Probate
• Accessible for emergency expenses
• Simplified underwriting and short form application

About Single Premium Policies

Two types of policies
There are two basic single premium policies. A single premium whole life policy accumulates at a fixed rate of interest based on the past performance of the insurance company. The other is a single-premium variable life insurance policy that enables the policy owner to select the way the funds are to be managed.

Time Frame
The death benefit will depend on the amount deposited, gender, age and health of the insured. In many cases, the single deposit will be multiplied by a factor of two or more when the death benefit is calculated. Typically the younger the insured, the higher the benefit received. For instance, a 65 year old healthy, non-smoking woman who deposits $100,000 into a single premium life policy could pass $200,000 or more in death benefit to her beneficiaries. Moreover, the benefit is income tax free to her recipients!

You decide what on the size of policy you buy based on your current portfolio as well as your income and expenses. If something happens that you do not expect, most single premium life insurance policies will allow you to withdraw funds in case of emergency. It makes the purchase of a large policy less threatening, particularly if you have few assets besides your single premium life insurance policy.

Remember, single premium life insurance is a valuable investment when it comes to wealth creation and transfercreating an immediate death benefit that is guaranteed until the owner passes away.