Maximizing Your Estate with Proper Coverage

Life insurance with a single premium (SPL)

Life insurance is often the foundation designed as a way to provide for a family’s financial protection. Once you make the decision to purchase life insurance, you’ll come to realize there are many different options for you to choose from. Life insurance with a single premium (SPL) is one such option when purchasing a whole life insurance policy. It provides lifetime protection and you only make a single premium payment. No additional payments will ever be required of you. Once you pay that premium the policy becomes paid-up with nothing else to pay for the rest of the insured’s life.

Some benefits of an SPL policy

The guaranteed cash value of this policy generally grows tax-deferred. In the event that you have accumulated cash values you have the option of accessing them during your lifetime. The policy is also eligible to earn dividends. Over time, dividends may accumulate as interest, or as purchase paid-up additional insurance, or even be payable in cash. That is certainly something to consider. Plus, no matter how large your death benefit, your beneficiaries will receive their money “income tax-free.”

One question that is often asked is, “are single premium variable, whole, and universal life insurance policies the same?” No, not really. Although the one thing that they have in common is that these policies are all based on paying a single premium, meaning you’ll pay just one lump sum up front, with life insurance with a single premium you’ll receive a fixed interest rate on the return which is probably considered a safer, less volatile choice when it comes to this type of policy.

As with most investments, you will need to manage the portfolio as you would any other financial portfolio. These types of policies provide you with the freedom to place percentages of the policy money in different funds, resulting in your returns either increasing or decreasing the funds based on your choices. If you prefer not to take the time necessary to study and analyze your life insurance portfolio, then you’ll likely be better off with a single-premium whole life insurance policy rather than a single-premium variable life insurance policy.