Best Single Premium Life Insurance, Which Type of Coverage is Best?

Written by CFA Insurance

When you are looking into life insurance policies, it’s a good idea to do your research. You want to make sure that you get the right policy for your needs. Not all types of life insurance work for every person. There are a handful of factors that can change the type of insurance you need.

One popular type of life insurance to consider is single premium life insurance. This is a good choice for many people. We will go into more detail about what it is later, but it is definitely something to keep in mind.

Though single premium life insurance is a great option, you need to do your research before actually getting a policy. There are several types of single premium life insurance that you should know about. You should also compare the different companies and the policies that they offer.

It’s a smart idea to work with an independent insurance agent. This will help so that the advice you get isn’t biased toward a certain company. An independent agent works with a number of companies and won’t be getting a commission for signing you up for a policy from one company over another.

Life insurance is a big deal so you need to take the time to fully understand your options and see what’s available to you. We would suggest doing some research on each type of life insurance to see which is the best. For example, you might start with single premium life insurance.

To start your life insurance search and to make your decision easier, we have broken down some of the basics of single premium life insurance. Let’s take a look at what this type of life insurance has to offer.


What is Single Premium Life Insurance?

Single premium life insurance is insurance that has only one premium payment. This is the main feature of single premium life insurance, and it’s what sets it apart from other types of life insurance policies. The payment remains the same for the duration of the policy.

With single premium life insurance, your policy acts as an investment. You can borrow against the accumulated cash value as needed. This is useful if you run into a financial emergency and need the extra cash. This is different from many other types of life insurance policies. Many other life insurance policies do not allow the insured to take out a loan.

In order to get a single premium life insurance policy, you will have to pay some cash up front. This can cause some difficulties for some prospects because a large amount of cash is required. For some, this can be the deciding factor.

Single premium life insurance policies are worth considering if you’re looking for life insurance. Next, we’ll go into some of the specifics about the types of single premium life insurance.

Different Types of Single Premium Life Insurance

There are a few different types of single premium life insurance that you can choose from. Before selecting a policy, you should look into each of your options and figure out which one will work best for you. These types of single premium life insurance include whole life, universal life, and term life. Though they are all single premium life insurance options, they don’t all work the exact same way.

To get you started on your research, we have broken them down below.

Whole Life

With all of these types of single premium life insurance, you will be paying a single premium and a lump sum up front. One difference with whole life is that you will have a fixed interest rate. This is usually a safe option for the insured. You won’t have to worry about a fluctuation in the insurance rate and you will know what to expect. 

Whole life insurance policies last for the duration of the insured’s life. They are not set up to a certain age or number of years. Once the insured dies, the death benefit is released to the beneficiaries. Keep in mind that whole life insurance is usually the most expensive type of life insurance.

Universal Life

Single premium universal life insurance still allows you to pay one premium and you will still pay a lump sum. The major difference between whole life and universal life is that universal life gives you coverage up to a certain age. This may be up to 100 or 110 years old. After that time, the policy is no longer active.

Term Life

With term life insurance, you will just have to pay one premium along with the upfront lump sum. This is similar to universal life, but you are insured for a specified term instead of up to a certain age. This term is set when you agree to the policy. This will commonly be 10, 15, 20, or 30 years, but the terms offered will vary by company. With this type of single premium universal life insurance policy, you will have some say over how your money is invested. You will have to manage this to some extent. If you would rather not do that, you should opt for a different type of policy.

Which Should I Get?

Many people opt for single premium whole life insurance because the interest rate is fixed. You don’t have to worry about the rate changes over time. You will always know exactly what you’re going to pay. This type of life insurance insures you for your entire life.

Another option is single premium universal life insurance. It gives you a cash value option. It operates a little bit different from whole and term life insurance. With universal life insurance, you are insured up to a certain age, such as 95 or 100.

If you like stocks or investing, single premium term life insurance might be a better option for you. Based on your choices, you may receive more or less money later on. As you can assume, this isn’t a great idea for someone who isn’t familiar with investments and making those types of decisions. This type of life insurance insures you for a set term or duration of time.

There is no single right answer for life insurance. It works differently for each person. You should take a look at each of the options listed to find the one that works best for you. Keep your own personal needs in mind to ensure that you get the best type of life insurance for you and your family. Figure out what your priorities are and what is most important to you in a life insurance policy.

It can be good to work with an independent life insurance agent who can work with you and compare your options. They know what they’re talking about and can help you to make the best decision based on your needs. This isn’t required, but it can definitely be useful to have someone guiding you along the way.

Single Premium Life Insurance Rates

Single premium life insurance rates are naturally going to vary. They depend on a number of factors, including:

  • Weight
  • Current health status
  • Health history
  • Hobbies (especially if they are potentially dangerous)
  • Occupation
  • Age
  • Gender
  • Family history

The policy and coverage that you choose also plays a big role in the rate. Still, it can be helpful to be aware of the rates out there so that you can make an informed decision. There are discounts available on many types of life insurance as well, so make sure you check with your insurance provider to see what they have to offer.

Different life insurance providers have different quotes as well. You shouldn’t expect all of the rates to be the same from one provider to the next. Check with different providers to see what rates they can offer to you. This will help you to get the best coverage and the best price for your needs.

Here are some sample rates for single premium life insurance.

These rates were calculated for a 40-year-old healthy male with single premium universal life insurance.

$500,000 of coverage: $74,456 premium payment

$1,000,000 of coverage: $136,184 premium payment

$2,500,000 of coverage: $340,462 premium payment

$5,000,000 of coverage: $680,924 premium payment

Remember that these same rates do not apply to every person and every company. They are simply to give you an idea of what you can expect to pay.

How It Works

When you are ready to get a single premium life insurance policy, you will start by receiving a medical examination. This is to see how healthy you are and how great of a risk it is for a provider to insure you. Then, you will have to pay a lump sum at the beginning. This ensures that your loved ones will receive the death benefit later on. This lump sum may be anywhere from $5,000 to more than $10,000, but this will depend on the insurance company and the policy.

Over time, your policy will continue to grow. This is like an investment or a savings account. For most people and policies, this growth is more significant than the growth in a normal bank account.

Depending on the type of single premium life insurance you choose, you or your family will receive the death benefit at a different time. With a universal policy, this will be at the end of the set duration of the policy. With a whole life policy, the benefit will be received at the time of the insured’s death. With term life, the benefit will be received at the end of the set term.

Discounts?

For many types of life insurance, you are able to get discounts. These discounts can help to offset the potentially high costs of life insurance. Plus, it never hurts to save a little money here or there. OUtside of the typical single premium discount, there are others you can explore. 

One of the best ways to save money is by working with an independent insurance agent. These agents aren’t connected to any company in particular so they won’t have any bias toward a certain company. This helps so that you can get a good deal on your life insurance and won’t be pushed toward a certain policy because of your agent’s commission. This isn’t necessarily a discount, but it’s a way to save money on your policy.

Another good way to save money on your insurance is by bundling. If you bundle your auto insurance and life insurance, you will be able to save some money. This is because the insurance companies want to keep you around and want you to use as many of their services as possible. Almost all insurance companies offer discounts on bundling.

Along with bundling, long-term customers may be eligible for discounts. Again, insurance companies want to keep getting your business and will give you discounts for sticking with them. If you have been loyal to an insurance company for a while, check in to see if they offer any type of loyalty discounts.

With life insurance, you will also have to undergo a medical examination. When you have this exam, your overall health will be assessed. Some people do have to pay more for life insurance based on what their medical examination results were. For example, if you’re a smoker your rates will be higher. You can get discounts just for being a healthy individual.

Sometimes, groups of people will be able to get discounts. This might include teachers or veterans. If you’re a part of a group like those, you should see what life insurance companies can offer to you. Some companies have these discounts and others don’t, so it’s best to look at all of your options. You can talk to your co-workers or friends in the same field as you to see if they have been able to get discounts on life insurance.

Start Here

Saving money on your life insurance policy doesn’t have to be complicated. There are plenty of ways to get a discount if you know where to look. Talking to an independent insurance agent can help you to get an idea of some of the discounts that might be available to you. Then, you can also contact individual companies to see what special savings you might get from them.

At CFA insure we shop around with all of the top A-rated life insurance companies on the market to get you the best rates, at no extra cost to you! Contact us today for a free consultation and we will help you get the best single premium rate on the market.

About Jason Hill
About Jason Hill

Jason is the founder of CFAinsure. His years of experience in the business have helped him serve and represent hundreds of clients. Jason ensures his clients are well educated and informed by putting their needs first. Each appointment is tailored to individual needs, via specific materials and educational tools. The real benefit for his clients is the end result: peace of mind.

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