Single Premium Policies for Seniors

There are plenty of ways that you can maximize your estate. One of the best ways to leverage the money you have and provide for your estate at the time that you pass away is to have whole life insurance, especially whole life insurance that has been paid up to date.

How is this possible?

With single premium life insurance.

Once you decide to purchase a life insurance policy, you will find that there are many different kinds of policies. A single premium life insurance policy can take the form of a whole life insurance policy or a universal life insurance policy.

As a senior, this might just be the best option for you, especially at a time when you do not have as many debts to worry about, you are focused more on building assets, and you can afford larger purchases.

What is a Single Premium Life Insurance Policy?

A single premium life insurance policy is also known as a “paid up” or “single pay” policy. As the name suggests, it is one where you pay once. You pay cash up front to secure the policy for the rest of your days.

This guarantees that your beneficiaries receive a death benefit when you pass away. The key here is that you have to pay upfront with a lump sum. Not everyone can afford this, so you must budget accordingly if this is something you want.

Types of Single Premium Life Insurance Policies for Seniors

Single premium variable, whole, and Universal Life Insurance policies are all single premium policies which means you still have to pay that lump sum up front but with the single premium whole life insurance you receive a fixed interest rate on your cash value return, so it is considered safer, a much less volatile choice.

Single Premium Variable Life Insurance for Seniors

If you choose the single premium variable life insurance policy, you are responsible for managing the portfolio the same way you would manage any other financial portfolio.

You have complete control over where you place your money and the returns, as a result, are the result of increases or decreases based on those choices. This policy is best for an individual who is happy to study and analyze the portfolio on a regular basis in order to mitigate losses and increase cash value gains.

Single Premium Whole Life Insurance for Seniors

With either the whole or variable policies that cash value gained will vary based on the company. Some life insurance companies set caps or minimums and maximums usually for the whole life insurance policies and sometimes by extension for the variable policies.

This helps to prevent any financial losses that would otherwise. In some situations, companies will tie the whole Universal cash value to the company performance, but they guarantee a specific interest rate between 3% and 8%.

With this cash value, you can take out tax-free loans against your policy. In the event that the loan amount and any subsequent interest is not repaid at the time of your passing the remaining balance is deducted from your death benefit.

The cash value can also be taken out and used for any unexpected medical expenses or financial need during your lifetime. If you have a positive balance, there is no need to take out a loan and you can have the earned cash value sent to you in the form of a check.

Single Premium Universal Life Insurance Rates for Seniors

The single premium universal life insurance cost less comparatively but the drawback is with the lower premiums you have very little cash value.

A 40 year old male who falls into the preferred Plus class would pay the following for a universal single premium policy:

Single Premium Payment Amount Coverage Amount
$74,466 $500,000
$136,184 $1,000,000
$340,462 $2,500,000
$680,924 $5,000,000

By comparison, this is what that same applicant would pay an annual premium for similar coverage:

Annual Premium Payment Amount Coverage Amount
$2,874 $500,000
$5,400 $1,000,000
$13,500 $2,500,000
$26,999 $5,000,000

If the average life expectancy for a male in the United States in 77, assuming that the male qualifies for a preferred plus rate, we add an extra 5 years for the sake of argument to that lifespan.

What Are the Cost Differences for Single Premium vs. Annual Policies?

Let’s compare the rates above:

A single premium universal life payment of $74,456 for $500,000 in face amount or $2,974 annually.  assuming the individual lives 42 more years and make annual payments at that same rate they would pay $120,000 period a single premium, by comparison, saved over $46,000.

For $1,000,000 in death benefits, a single premium payment is approximately $136,000 or an annual payment of $5,400. By the time this individual passes away, they will have made $226,000 and could have saved over $90,000 with the single premium.

For $2,500,000 in coverage, The single premium payment would be $340,000 and the annual payment would be over $13,000. Again, assuming this individual lift 42 years longer they would pay $567,000 in annual premiums and could have saved $226,000 by using the single premium payment.

A single premium payment of $680,000 would get $5,000,000 in death benefits. The annual premium for this death benefit would be just shy of $27,000. In the end, that same individual making 42 more annual payments would have given $1,134,000. Using the single premium, they could have saved $453,000.

When Should I Buy a Single Premium Life Insurance Policy?

Obviously, there is no perfect fit for every applicant. This type of policy might be well outside of your budget.

However, in the event that you will require ongoing medical treatment, there are single premium long-term care life insurance policies that function as a hybrid. Essentially you take out a single premium policy with a long-term care rider.

With this rider, you can apply it to home health care or nursing home costs. You can use this Rider if you are diagnosed with Parkinson’s, Alzheimer’s, Dementia, or if you are unable to perform 2 out of 6 activities of daily living.

Other living benefits like the accelerated death benefit rider are typically included free of cost. This benefit allows you to access a portion of your total death benefit if you are diagnosed as terminally ill. You can then use the cash for whatever you need.

Most companies limit the amount you can take out to 50% of your death benefit so that there is still something left behind for your beneficiaries.

Certain companies allow you to access your cash value in an emergency.

Many people who have the cash to pay for a single premium policy typically use it as a tax shelter to reduce their taxable income while still making a smart investment.


With this policy you never have to worry about missing a payment. You do not have to stress about future payments especially when your financial situation changes. You pay the premium once and you never worry again. This is particularly beneficial for people who are using the single premium life insurance trusts for estate planning.

Estate Planning

If you are using it for estate tax purposes the initial amount that you gift to the policy will be taxed against your lifetime exclusion, however, your subsequent leverage is usually well worth it.


Your policy functions like an investment. If you take out a policy such as a fixed index single premium universal life insurance policy, you get the opportunity to grow more money.

The value of the policy will increase with time and most companies give you a percentage of growth that is higher than you would get in a bank. If you don’t take out that cash value it is simply applied to your death benefit.


If you want to leave behind money for your children and grandchildren, this might be the best option for you if you can’t afford it.



The cost is the biggest disadvantage or many seniors. You have to pay all of the money up front. Unless you have a substantial amount of money in your savings this might be difficult for you to do especially if you want a substantial policy. A good policy is going to cost at least $10,000 upfront.

Medical Exams

The single premium policy whether you pick a whole or universal life policy is going to require a medical exam. If you decide to invest money in your policy later, you will have to use a life insurance agent to underwrite the policy a second time which could require a second medical exam.

Tax Concerns

The cash value that you withdrawal is taxed. The profits you earn against any investments will be taxed if you have to take out that cash value prior to passing away. This is typical of such Investments but it’s still something to consider.

How to Find the Single Premium Life Insurance Plans for Seniors

If you are considering a single premium insurance policy, it is best that you compare the different companies offering this policy specifically with a third-party broker rather than an agent who works directly for an individual insurance company.

These individuals can learn about your budget, your health, and your financial needs and then provide custom recommendations. With this information in hand, you can find the best policies for the coverage you want and the amount you are able to spend on your single lump sum premium.

The best thing you can do is speak with an expert. Our independent life insurance agents can help you undertsand your policy options to help you find the best coverage for you and your family.

Give us a call today to work with an expert who can compare the best single premium life insurance rates for you from some of the best single premium life insurance companies on the market.

Or, get started using our online quoting engine for quick and easy life insurance rates.

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