Using Single Premium Whole Life as a Wealth Transfer Strategy

A Single premium whole life insurance is funded with a single premium that is often a large amount. The size of the death benefit depends on the premium amount as well as the age, gender, tobacco use and health of the insured. Like any other life insurance policy, a single premium whole life provides the named beneficiary with a guaranteed tax-free death benefit at insured’s death. A single premium whole life is specifically designed as a wealth transfer tool and it is often used in estate planning, mainly to maximize an individual’s inheritance to their heirs, tax-free.  As an example, a Vantis Life EstateWise Platinum single premium whole life policy allows a relatively healthy 65-year old female to make a $50,000 single premium payment to the life insurance company that will be worth about $103,000 available tax free to her heirs upon her death.  If she deposits the same amount in a taxable account (i.e. Certificate of Deposit) or a tax-deferred account (i.e. Annuity), using a constant 4% return and 25% tax bracket (both the owner and beneficiary), it would take approximately 25 and 23 years respectively for those accounts to reach the same $103,000 offered by EstateWise Platinum from its issue.

Most Single Premium Whole Life policies also offer living benefit options such as, a principal guarantee, chronic illness, critical illness, terminal illness, and a charitable giving rider.

If you are between the ages of 50 and 80, in reasonably good health and have some legacy money earmarked for your loved ones or favorite charitable organization, a Single Premium Whole Life policy may be the right choice for you.


Our content is created for educational purposes only. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Vantis Life encourages individuals to seek advice from their own investment or tax advisor or legal counsel.