Single Premium Life Insurance
Definition - What does Single Premium Life Insurance mean?
A single premium life insurance policy is an insurance policy in which the policyholder pays a large amount upfront, a one-time premium payment, in order to receive life insurance coverage. This is an alternative to standard life insurance policies, whose premiums are paid periodically over a long span of time.
Insuranceopedia explains Single Premium Life Insurance
Because single premium life insurance policies only have one premium payment, the amount of money made from this payment is usually substantially higher than it would be in a standard policy. For example, a single premium life insurance policy premium payment may be $30,000 in order to receive a death benefit of $250,000. However, with a standard policy, a policyholder may only have to pay $150 a month in order to get the same death benefit. Many single premium life insurance policies have an investment component, in which case the death benefit can be higher if the investments perform well.