Using Single Premium Life Insurance to Transfer Wealth

Youth and seniors alike want to learn effective means to maximize the distribution of assets to their spouses, younger generations, and favorite charities. A will and/or a trust can assign assets to beneficiaries, but they are not designed to create wealth so much as they are to preserve it. No need to panic, because life insurance products instantly create wealth and can increase the amount passed on to a recipient.

Single premium life insurance has a single premium that creates an immediate death benefit that is guaranteed until the owner passes away. But the death benefit will depend on the amount deposited, gender, age, and health of the insured. Usually, the single deposit will be multiplied by a factor of two or more when the death benefit is calculated, and typically, the younger the insured, the higher the benefit received. To give you a picture, a 65 year old healthy, non-smoking man who deposits $100,000 into a single premium life policy could pass $200,000 or more in death benefit to his beneficiaries, and the benefit is income tax free to his recipients.

This can also benefit the insured or the purchaser during his or her lifetime because the cash value in a fully funded policy will grow quickly. It can provide income to the purchaser if needed, and in turn, the purchaser can also surrender the policy for its cash value at any time. There are few policies guarantee the cash value to be no less than the one time deposit. The insure is guaranteed to get the investment back if he or she needs to surrender the policy due to unforeseen circumstances.