Single Premium Whole Life

Single premium whole life insurance can be a wise investment if you have at least $5,000 you don't need, want a generous death benefit, and need an investment that's safe and profitable. It can be used to pay a non-taxable sum to beneficiaries immediately upon your death. It can also insure a child in your name while you retain the ownership and cash value of the policy.

A one-time payment yields a fully-paid death benefit that's valid for as long as the policy remains intact. The death benefit is substantially higher than the cost of the policy. At age 60, it can be double the initial investment. At age 50, it can be four times higher. The younger the insured, the higher the benefit amount will be. The policy grows as long as it stays in effect, yielding dividends at a competitive, fixed rate based on current market conditions and the standing of the insurer. The earnings can be withdrawn as cash or applied to what's called "paid up additions." These are additional single premium whole life insurance policies, just like the original, that also pay dividends. Single premium whole life policies come with the option to use up to 90% of the cash surrender value as collateral against a loan. The collateral amount reduces the death benefit and won't earn interest as long as the loan remains unpaid. When the loan is paid off, the death benefit is restored and the policy again pays dividends.