What Does Single Premium Mean?
A single premium is a one-time payment for an insurance policy. It is an alternative to spreading out insurance payments in intervals. Insurance money from a single premium policy is paid to the insured right after the maturity of the policy or to the beneficiary as a death benefit without having to make any more payments on the policy prior to these events.
Insuranceopedia Explains Single Premium
Since a lump sum payment is required, the insured must have a substantial amount of cash available to pay a single premium for their insurance.
One advantage of a single premium policy is that the insured no longer has to set aside money to prepare for future payments. The cash value of single premium policies also increases more quickly compared to policies that are paid monthly, quarterly, or annually.
While the insurer can no longer ask for payments from the insured, the latter may have the option of withdrawing a fraction of the total amount to pay for a financial emergency.