Are you planning for a secure retirement and eventual transfer of your estate? You do not have to be very wealthy to benefit from this. Let us look at one product that is becoming more noticed these days with advisors and people who are making future plans. This is called single premium whole life (SPLI).
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.
Look at the example of a healthy 70 year old who retired from the public school system. Her savings and teachers pension enable her to live well. But she also has another $50,000 she inherited from her own parents. She could take this cash and fund an SPLI for, let us say, $200,000. This way she sets up a nice estate to pass on to her kids and grand kids.
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.
What types of people are happy with a product like SPLI? Well, it seems to work out very well for those with a few thousand dollars that they do not expect to need in the near future. And of course, it is an option for those who would like to take that money and turn it into more money for their estate.
Be aware that your insurer will probably charge you for early surrenders. So if you do have to cash out before the term of these fees, you could lose money. Policies are different, so make sure you know how this will work for you.
One possible future use of an SPLI is its ability have a cash value very quickly copared to regular life insurance. Once that happens, you can have a place to borrow from. You may also cash out the policy.
Another feature is the fact that many policies allow you to accelerate the death benefit in case of a terminal illness. This way, a person could use the money if they need it. Some also have provisions for withdrawing part of the cash value in case of nursing home confinement.
These policies are not for everybody. If you do not have a lump sum of money, you may be better off with a regular life insurance policy and monthly payments. You should also understand that SPLI may be treated differently by the IRS. And finally, if you think you may need to withdraw your money in a short time, it will probably not benefit you. Fees or surrender charges could reduce your actual cash quite a bit in the short term.
Get more information on questions like Why Retired People Purchase Life .
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