Single Premium Life Insurance For Retirement Planning

Would you like to be able to take a lump sum of money, and then turn it into a larger sum of money so you could pass it on to the next generation? If you have spoken to a financial advisor or insurance agent, they may have mentioned SPLI (Single Premium Life). This product can work well for some people.

The most obvious difference is that you make one large cash payment when your coverage begins. You are probably used to having a monthly bill! That one lump sum funds your coverage, and so you do not have any more payments to make.

That money, paid at the start, will guarantee coverage for your whole life. What you have done, really, is to turn a sum of cash into a much larger amount of coverage on you. This is how you can take one amount of money, and turn it into a larger estate to pass on to your beneficiaries.

Let us say that a retired school teacher is comfortable with her pension and savings. In this example, she just inherited $22,000 from an uncle, and is certain that she will not need to use this money to enjoy her life. She may be able to take this amount of money and buy a $100,000 SPLI policy so she can have a very nice estate to pass on to her son.

Now understand that the price you would pay for a particular policy will depend upon many different things like your age, health, the insurance company, etc.

Who should consider single premium life (SPL)? It is something to consider if you have a lump sum of cash that you would like to leave to your heirs. Your children, grandchildren, or a favorite charity could be the beneficiaries.

Be sure you will not have to use the money for a few years. In the first few years, policies can impose fees and surrender charges. So it is probably not the right life insurance if you are not sure if you will need the money to live on.

Another advantage to the owner is a SPL policy's ability to grow a cash value quickly. If you can leave the money alone for the few years you will need to get past surrender charges, you can have a nice place to borrow money from. You can also cash the policy in. The cash value should grow quickly since the insurance is already funded by the initial payment!

Accelerated death benefits and nursing home confinement provisions are another feature. In some cases, the insured person can actually use part of the face value while they alive!

But SPLI is not good for everybody. There are some disadvantages to consider. You do need the money to fmake that first, and only, payment. If you do have to surrender early, you risk losing money for fees. The IRS treats these a little differently than regular life policies too. You may not enjoy all of the tax benefits.

Are you interested? Look here to get Single Premium Whole Life Explained.

Term Life Insurance which Returns Premiums!

How do you get your money back from a term life insurance policy if you don't die?

Return of Premium (ROP) Riders on Term Life
Most people understand how simple term life works. You buy a policy for a set amount of time. This time period (called the term) may be 1 year or 30 years. But after the policy ends, the contract is over. You are not covered any more, and your term life policy does not build a cash value.

What is there was a way to get your money back if you bought term life? Well, some top insurers offer a return of premium rider on term life policies. Return of Premium Term Life riders are an extra option with an extra cost. But if you survive your policy, which is what we all want to do, you will get a refund of every premium dollar paid. This includes the extra money you spent for the rider.

An Example of ROP at Work

This can be a very handy way to plan for the future. Let us say you spend $30 a month for a $100,000 30 year term policy when you are 32 years old. After 30 years, your contract ends. Now you are 62, and you have spent over $10,000 for coverage you do not have any longer.

But let us say that you chose to spend $35 a month to buy term with an ROP rider. Now you turn 62, and you get back a check for over $12,000! How does that sound?

Learn more about life insurance and get free quotes : Term vs Whole Life Insurance