How to Buy Single Premium Life Insurance

Step-by-Step Guide

1. 1

   Step 1: Learn how it works.

   Single premium life insurance (SPL) is a life insurance policy that is purchased with a lump sum of money up front.
   
   In return, the death benefit is guaranteed to remain funded until your death.
   
   Insurance carriers offer a range of SPL options.
   
   As a policyholder, you may be able to withdraw from your SPL under specific circumstances.Depending on the carrier you choose, an SPL policy may cost you anywhere from $5,000 to $25,000 or more.
   
   While this seems high, the death benefit is higher than the premium cost.
2. 2

   Step 2: Select a carrier.

   Choose the company from whom you want to purchase your SPL policy.
   
   If you go with an insurance carrier with whom you have other policies, you may qualify for a discount.
   
   Each insurance carrier offers different SPL options at different costs.Different insurance companies have different minimum investment limits.
   
   Some are as low as $5,000.
   
   Others start at $15,000 or more.
   
   Decide how much you have to invest in an SPL policy.
   
   Decide how aggressive you want to be with your investments.
   
   Investment possibilities range from conservative fixed options to riskier variable options. , To purchase an SPL policy, you will need to fill out an application to see if you qualify for life insurance.
   
   The application will ask for personal information and health history and lifestyle information, and you may be required to take a physical exam.
   
   Then, an underwriter reviews your application and medical history to determine how much of a financial risk it would be to insure you.
   
   This may affect the amount of the premium you are required to pay.
   
   Once your application has been reviewed, you will either be approved or denied for an SPL policy., Choose from two investment options.
   
   Single premium whole life is the conservative, stable option.
   
   Single premium variable life allows you to take advantage of gains in the market.
   
   Your choice should be based on your risk tolerance for fluctuations in the market., Single premium whole life pays a fixed interest rate.
   
   This means the rate at which interest accrues on your investment never changes.The rate is based on the insurance company’s assessment of current economic conditions.
   
   This option offers you consistent and steady growth on your investment.This option saves you from downturns in the market, but you can also miss out on significant financial gains if the market performs well. , Single premium variable life allows you to select a combination of investment products to grow your initial premium.
   
   You can choose from managed stock, bond and money market accounts.
   
   Also, a portion of your investment can be placed in a fixed account.While you run the risk of low performance with this option, you also have the potential for larger financial gains than you could get with a consistent, fixed rate.
3. 3

   Step 3: Qualify for life insurance.

4. 4

   Step 4: Decide on an investment option.

5. 5

   Step 5: Consider single premium whole life.

6. 6

   Step 6: Consider single premium variable life.

Detailed Guide

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