Why Single Premium Life Insurance Policies are Not a Good Short-Term Investment

Why Single Premium Life Insurance Policies are Not a Good Short Term Investment

Not generally. Single premium policies typically have significant surrender charges in the early years. Also, because newly-issued policies are likely to be MECs, if the policyowner terminates the policy before age 59½, he or she may incurs a 10 percent penalty tax in addition to the income tax payable on any taxable gain from the […]

How to Select the Best Single Premium Life Insurance Policy

How to Select the Best Single Premium Life Insurance Policy

Selecting the best cash-value life insurance policy is a difficult task involving a number of complicated concepts and analyses. However, because the investment element of single premium life insurance is a paramount concern, focus should center on the following factors: Compare the current rate being credited to policy cash values and the length of the […]

Commissions and Acquisition Costs on Single Premium Life Insurance

Commissions and Acquisition Costs on Single Premium Life Insurance

The sales commission is generally about 3 to 10 percent on these products. In addition, the insurance company typically pays a state premium tax of about 2½ percent. However, these fees generally are taken into account when the company quotes the short-term guaranteed net rate that it will credit to the policy in the first […]

Alternatives to Single Premium Life Insurance

Alternatives to Single Premium Life Insurance

All life insurance policies can provide tax-free cash upon death. The unique feature of single premium life insurance is its large tax-free or tax deferred cash buildup. If a person desires a combination of high tax-preferred cash accumulation and life insurance coverage, they should consider exploring several others: The combination of a single premium deferred […]

Tax Implications of Single Premium Life Insurance

Tax Implications of Single Premium Life Insurance

Death benefits under single premium life policies usually are paid free of any federal income tax. In general death benefits paid under these policies are subject to the same federal and state income, estate, gift, and generation-skipping transfer taxation rules as all other types of life insurance policies. Taxation of Lifetime Distributions and the MEC […]

The 4 Primary Disadvantages of Single Premium Life Insurance

The 4 Primary Disadvantages of Single Premium Life Insurance

Understanding the disadvantages of single premium life helps consumers make the most educated decision. Here are the 4 major disadvantages that should be considered when considering single premium life insurance: Visit our articles archive here. View the latest policies that Lifequotes has to offer. Reproduced with permission.  Copyright The National Underwriter Co. Division of ALM

8 Advantages of Single Premium Life Insurance

8 Advantages of Single Premium Life Insurance

Understanding the advantages of single premium life helps consumers make the most educated decision. Here are the 8 major advantages that should be considered when considering single premium life insurance: The initial guaranteed rate in a single premium policy generally is quoted “net” of commissions and other fees. Therefore, the policyowner’s entire premium goes into […]