Life insurance is very important so you need to make sure you do it right. There are lots of considerations to make about life insurance. There is plenty to research before you make the big jump into a life insurance policy.
By doing your research, you can make sure that you are getting the best insurance policy for your needs. Without this research, you might not end up with a policy that’s right for you. It’s definitely worth taking the time to look into life insurance policies before ending up with one that may not work for you.
One type of life insurance is a single premium whole life insurance. Next, we will go into detail about whole life insurance, single premium whole life insurance, and all of the other information that you need to know.
Having these details will help you to make an informed decision about the types of life insurance you can get. Take some time to compare a single premium whole life with your other options and see which one meets your needs.
Here is everything you need to know about single premium whole life insurance.
What is Whole Life?
Whole life insurance is very similar to what it sounds like. It lasts for the duration of the life of the insured. It is a type of permanent life insurance. It comes with a guaranteed death benefit and a guaranteed cash value. Whole life cash value often operates as a savings account would. As you continue to pay, the cash continues to accumulate. The death benefit is paid out at the time of the death of the insured.
Whole life insurance policies are a good choice for anyone who has the money to pay for slightly higher premiums. These policies are also great for people who are wanting to add to their estate planning.
With whole life insurance, your premiums will remain the same throughout the duration of the policy. Not all life insurance policies have level premiums like this. For most whole life insurance policies, you will be paying the same premiums each year, so you will know what to expect. This is very helpful when it comes to budgeting. It also helps so that you can make sure you will be able to afford the policy for the duration of your life.
In order to keep the policy active, you have to stay on top of the premiums. If not, you may not be able to continue to keep the policy. Since the premiums will stay the same, you will know what payment is expected. If you stop, the cash value may be given to you. The company also has to offer you either reduced paid paid-up coverage or extended term insurance.
With a whole life insurance policy, you have the option to borrow against the cash value. Some policies will have a waiting period, which means you could have to wait three years before borrowing. This depends on the company and their policy though. The cash value that is borrowed is then used as collateral.
Keep in mind that there are many different types of whole life insurance that you might get. They aren’t all the same so it’s good to compare them all. This will help you to know what you’re getting into. It will prevent you from getting a policy that might not be the best for you.
These are some of the types of whole life insurance:
- Non-participating whole life insurance
- Participating whole life insurance
- Level premium whole life insurance
- Limited payment whole life insurance
- Indeterminate premium whole life insurance
- Single premium whole life insurance
For now, we’re going to focus on single premium whole life insurance policies. We want to make sure you know everything there is to know about this type of whole life insurance.
What is Single Premium Whole Life?
One type of whole life insurance is single premium whole life insurance. The main thing to remember about single premium whole life insurance is that the premium is consistent for the duration of the policy. You will know exactly how much you will be paying as long as you have the policy.
As mentioned, whole life insurance lasts for the duration of the insured’s life. This is the same with single premium whole life insurance as well. This means that the premium will be the same amount for the whole life of the insured.
Whole life insurance guarantees that the insured is covered for the duration of their life. This is different from universal life insurance, which is active up to a set age, and term life insurance, which is active for a set number of years.
Pros and Cons of Single Premium Whole Life
There are several pros and cons to single premium whole life insurance. It’s important to be aware of these pros and cons so that you can make the right decision for your life insurance. It’s a good idea to weigh the pros and cons of each of your life insurance options to see which is the best choice for you.
Here are some of the pros and cons of single premium whole life insurance.
- The premiums are predictable: Since a single premium whole life insurance policy has a fixed premium, you can plan for what the payments will be. With other policies, these premiums may fluctuate and can be hard to budget for. Single premium life insurance helps you to know exactly what you will be paying before you even have to pay.
- If the premiums are paid, the beneficiaries will receive the benefit: Regardless of the time of the insured’s death, the beneficiaries will receive the benefit. For some other policies, this isn’t always the case. There may be certain restrictions that affect how the beneficiaries receive the money.
- You can access the cash value: With single premium whole life insurance policies, you will get access to the cash value on your policy. There may be certain restrictions on this, but many companies will give you loans as needed. This is especially helpful if you have an emergency and need that extra money.
- You can use an accelerated death benefit rider: If you get diagnosed with a terminal illness and need the death benefit early, many insurance companies will give you some of that death benefit. This can be helpful for covering medical costs and providing for your family as you deal with the terminal illness.
- It can be expensive: Whole life insurance is usually more expensive than other types of life insurance. If you have previously used a different type of life insurance, such as term, you might be shocked by the prices of whole life insurance. This isn’t necessarily something that should turn you away instantly, but it is something that can prevent people from getting this type of whole life insurance.
- There is a costly upfront fee: When you first sign up for single premium whole life insurance, you will have to have at least $5,000 ready to go. Some policies require $10,000 or more. If you don’t have this amount of cash in savings, you will not be able to get a single premium whole life insurance policy. You will have to wait and save up or use a different type of life insurance.
Companies That Offer Single Premium Whole Life Insurance
Most life insurance companies offer single premium whole life insurance policies. This makes it easy to find these policies if you want to go this route. Each of the companies and the policies they offer are not the same though. It’s important to compare the companies to see which is the best for you.
To know the specifics about each company and how their coverage works, you will have to speak to them about your personal needs, health, and more. This will give you a more accurate understanding of the companies. Some general information about the companies and their single premium whole life insurance policies is a good place to start though.
Here are the top 10 companies that offer single premium whole life insurance.
American National: With American National’s whole life insurance policies, you are given a fixed premium to pay. Along with this, the death benefit is fixed and the cash value can accumulate. Depending on the policy you choose with American National, you may be able to borrow some of that cash value.
Gerber: Gerber is a good life insurance company to use for whole life insurance if you can’t seem to get insured elsewhere. With Gerber’s whole life single premium policies, you don’t need to get a medical exam. This can cost more, but it is a good way to get insured if you can’t find a provider to insure you for health reasons.
United of Omaha: United of Omaha has a single premium whole life insurance policy. Something to keep in mind is the cost of whole life insurance, but Mutual of Omaha helps with that. They offer very inexpensive policies compared to other companies.
Assurity: Assurity offers a single premium whole life insurance policy. As with all single premium policies, your premium will be at a fixed rate. This company will also allow you to access the cash value at any time through their policy loans, especially if there is an emergency. The cash value also grows tax-deferred.
Guardian: Guardian has a single premium whole life insurance policy, but there’s something that sets them apart from the rest of your options. One of the great things about Guardian is that they offer a long list of special policy riders. This helps you to have more options if you end up needing a rider later on.
AXA Equitable: You can use AXA Equitable to get a single premium whole life insurance policy. One of the benefits of using AXA Equitable is their living benefits rider option. The rest of their single premium whole life insurance policy is pretty similar to the other options.
SBLI: If you’re looking for a provider that will give you more than a few options for whole life or single premium whole life, you should consider SBLI. They have a great selection of whole life policies for you to choose from. This will ensure that you get the best policy for your needs.
New York Life: With New York Life, you will have access to single premium life insurance policies like you will with the other companies we’ve listed. In addition, you will be able to customize your policy. This helps so that you can get a policy that fits all of your needs.
Foresters: With Foresters, you can get a single premium whole life insurance policy. With a whole life policy, you have the opportunity to build up dividends. Foresters pride themselves on paying dividends to the insured for over 100 years. If you’re hoping to use dividends with your whole life policy, Foresters is a good choice.
Mass Mutual: Like the previous company, Mass Mutual offers dividend earnings. This does depend on the policy that you choose, but at least some of their single premium whole life policies offer dividend earnings. These can be used as cash value or they can be put toward your premium.
Overall, single premium whole life insurance is a good option to keep in mind. Before committing to a policy, be sure to look at a specific company’s policies as they are not all the same.
Since single premium policies have a steady premium rate for the duration of the policy, you will be prepared to pay the premium. You don’t have to worry about any sudden changes that could take you by surprise.
When you’re ready to look for a single premium whole life insurance policy, sit down with an independent life insurance agent. Doing this will ensure that you get the best policy and the best pricing. Having a professional go over the information with you and helping you compare the options can be a big help.
The good news for you, is you’ve arrived! CFAinsure is an independent agency specializing in single premium life insurance coverage. Get in touch with us for a free consultation today!