Basics of Single Premium Life Insurance
Single premium life insurance is one option of life insurance policy. This type of life insurance policy has a set purpose for individuals who choose it and may benefit one group of people over another. The following will discuss what this type of policy is and the benefits to obtaining it.
What is Single Premium Life Insurance?
A single premium life insurance policy is one which the insured pays a single premium at the initial enactment of the life insurance policy and the payout upon their death will be income tax-free for the beneficiaries. For those who have the money to pay up front for a single premium life insurance policy this is an optimal policy to consider. The single premium life insurance rates will vary depending upon the insurer which issues the policy and the exact type of policy it is.
Benefits of a Single Premium Life Insurance Policy
One of the big benefits to the single premium life insurance policy is that the payout upon the death of the insured is income tax-free. This is a good option for those insured individuals who don't want to leave their beneficiaries with taxes to pay and wish to provide them with the entire coverage amount.
Another benefit of the single premium life insurance is that the insured does not have to worry about paying an annual premium. Once the single premium is paid they are paid up on the policy. Again, although this may only be an option for those who have a good amount of money to spend up front, it is one which will come in handy to the insured who chooses the single premium life insurance policy.
Also, this type of insurance policy can be seen as an investment. Since the amount can increase throughout the years resulting in a larger payout than the initial single premium payment, the investment portion of the single premium life insurance is highly desirable for many.