Single Premium Life Insurance
What Does Single Premium Life Insurance Mean?
A Single Premium Life Insurance policy is a type of life insurance where the policyholder makes a one-time, lump-sum premium payment to secure coverage. Unlike standard life insurance policies, which require periodic premium payments over an extended period, this approach provides coverage upfront with no ongoing payment obligations.
Insuranceopedia Explains Single Premium Life Insurance
Single Premium Life Insurance policies typically involve a significantly higher upfront payment compared to standard policies. For instance, a one-time premium payment of $30,000 might provide a death benefit of $250,000. In contrast, a standard policy might require periodic payments, such as $150 per month, to secure the same coverage amount over time.
Many single premium life insurance policies also include an investment component. If the underlying investments perform well, the death benefit may increase, offering additional financial advantages beyond the guaranteed coverage.
