The present day life is full of risks, which are required to be dealt on regular basis. A person can face any kind of physical or mental health ailment, financial instability or any other kind of risk in the normal course of life. One of the best ways of hedging against these risks is by purchasing a suitable life insurance plan. There are a number of life insurance plans and policies which can surely help you in reducing the day to day risks of life and will provide the much needed assurance to your future. One such popular insurance plan is the single premium life cover policy. Further in this article, I have highlighted some points about this insurance policy. This information will help you in knowing every bit and bite about the policy and its benefits as well.
What is Single Premium Life Insurance?
The concept behind this life insurance policy can be understood better by breaking the whole term into small understandable parts. First of all, single premium means a single payment of a lump sum amount as against the payment of monthly installments. When you purchase a single premium life policy, it mainly provides you with a death benefit. A certain amount of money is paid to the persons listed in your list of beneficiaries in the event of your death. The amount of death benefit is perceptibly greater than the principal amount which is invested in the policy. This amount is sometimes even twice the amount of initial investment.
There are mainly two types of single premium life insurance policies namely single premium whole and the single premium variable life insurance. The single premium whole life cover policy provides a fixed rate of interest on your investment. While, on the other hand, the variable life cover policy offers returns which are completely dependent upon the securities in which the insurance companies invest. The rates of this policy are completely in the hands of the insurance companies and these rates are adjusted according to the age and the life expectancy.
Benefits Of Single Premium Life Insurance
One of the biggest advantages of purchasing these single-premium life assurance policies is the assured death benefit. This death benefit can be even twice more than the amount of money you invest in. Apart from the death benefit, your investment is tax free. Moreover, the amount received by the beneficiaries is also tax free in all regards. You can also draw a loan of about 90% of the amount of policy, by using the policy as a collateral security. Therefore, you can fulfill all your financial and other needs with the help of this single installment insurance policy.
So, this was all about single premium insurance policies. Hope this article has abolished all the doubts in your mind regarding the single installment insurance policy. It is one of the best products which can eliminate all the uncertainties and risks in your life. It will also provide a complete financial security in order to lead a better and self dependent life in the future.