4 Single Premium Life Insurance Facts

Single premium life insurance (SPL), in general, is a type of life insurance policy in which the insured pays one payment in exchange for a guaranteed payout,  no matter when he or she dies.  

Qualifying and Getting SPL Insurance

Although easier to qualify for than many other life insurance policies, SPL is relatively expensive and usually costs a minimum of $5,000. If you do not have a lump sum of disposable income to set aside, you should not consider investing in a SPL insurance policy.

The Benefits

The size of the death benefit depends on how much the insurer pays for the policy. It also depends on the age and health of the insurer. No matter the size, the benefits received by the beneficiaries are not taxable.

The Difference

SPL insurance allows you to protect yourself in your old age. You can tap into your life insurance policy to pay for care that you need in your elderly years. Any money that you do not use will go to your beneficiaries. If you have an emergency, you can take out up to 90% of your SPL policy to cover your needs.  

Options

The two main types of SPL policies available are whole life or variable life policies. Whole life gaines a fixed rate of interest that is established by the market over the term of the policy. Variable life gains based on an index of the insured's choosing.

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