The Little Known Single Premium Life Insurance Policy

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The effective use of single premium life insurance can create an atmosphere of peace and tranquility for an insured and his or her family beyond comparison. You have worked hard over the years and accumulated a pretty hefty nest egg. May be, you received an insurance settlement, won the lottery, accumulated a large sum in a retirement account, or inherited some cash from a caring relative. You, however, feel there is still a need for some life insurance, possibly to pay estate taxes. You check out several types of life insurance including single premium life insurance.

You may discover that a single premium life insurance policy is exactly what you are looking for. Here is a brief outline of how these policies can work for you.

• You deposit a one time lump sum in a reputable life insurance company. This is a whole life policy that will instantly secure a death benefit for your beneficiaries that is several times the amount of cash you put into the life insurance plan. You can set the death benefit up in such a way that it constantly grows, as long as it remains in force.

• Single premium life insurance policies accrue dividends, which may be used to purchase paid up additions. Paid up additions are additional insurance policies of the same type as the original policy. This additional insurance also accrues dividends. There, therefore, is constant growth in the amount of life insurance, and in the cash values attributed to your insurance policy.

  You have the option of receiving your dividends in cash or leaving it with the company to accumulate at interest. The interest rate is usually quite competitive.

• Because your single premium life insurance policy has a cash value, it also has a loan value. Of course, if a loan is taken the insurance growth of the life insurance is limited until this loan is repaid. Remember, also, that for the period that you have that loan unpaid, the amount of the loan is not accumulating any interest, and, is not available to purchase paid up additions.

Remember, dividends are not guaranteed.