Guide For Single Premium Life Insurance Policy And Rates
| Single premium life insurance is a type of life insurance where you pay the premium amount in a lump sum for coverage and the insurance stays valid until you die. There different versions of single premium life insurance plans, which offer a wide range of investment and withdrawal options. |
With a single premium life insurance policy, your cash builds up rather quickly because the entire policy is paid in full. Just like any other life insurance policy, the death benefit depends upon the amount of money you pay, your health and age. If you are young, it goes without saying that your life expectancy will be longer and this will give enough time for the premium to grow before your death. In addition, the higher the premium, the higher will be the death benefit.
Although single premium insurance policy give you a way of providing for your family, you still need to take into account unexpected expenses that might come as you age. You have to take into account long term care and many people do not opt for long term care insurance because they find it difficult to pay the premiums. However, single premium policy also has a provision for this. There are some policies that allow you access to your death benefit free of tax so that you can pay for long term care. If you should die, the balance amount is given to your beneficiaries tax free.
Many single premium life insurance policies also have a provision that allows you to withdraw a part of the benefit incase you are diagnosed with a terminal illness and you have a life expectancy of 12 months or less.
Almost all life insurance companies offer single premium life insurance policy and you can contact anyone of those to get rates for the policy. However, you should have a lump sum to pay the one time premium so make sure you have the money for it.
A point to remember is that you will have to pay a 10 percent IRS penalty on all gains if you withdraw funds from your single life insurance policy before you reach the age of 59.5 years. In addition, you are also liable for income tax on the gains.
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Guide For Single Premium Life Insurance Policy And Rates
