Best Single-Premium Life Insurance Companies in November 2024

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Updated: November 20, 2024

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Single-premium life insurance involves a one-time payment that fully funds a policy, providing life coverage with a guaranteed death benefit.

State Farm, Northwestern Mutual and MassMutual are MoneyGeek's highest-rated single-premium life insurance companies. Ratings are based on a comparison using data from J.D. Power, AM Best, NAIC and MoneyGeek affordability scores.

A single-premium life insurance policy is best for those who can afford it and want the guarantee of a death benefit right away. It is also suitable for those who want to maximize their cash value growth, as the earlier you buy, the more opportunities there are for capital appreciation. The cash value can fund future expenses, such as retirement or college.

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2024

Best Single-Premium Life Insurance Companies in 2024

Best Overall - State Farm
Runner-Up - Northwestern Mutual
Most Affordable - Mass Mutual

A single-premium life insurance policy is best for those who can afford it and want the guarantee of a death benefit right away. It is also suitable for those who want to maximize their cash value growth, as the earlier you buy, the more opportunities there are for capital appreciation. The cash value can fund future expenses, such as retirement or college.

Key Takeaways

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Single-premium life insurance is a policy in which you make one lump-sum payment to receive a guaranteed death benefit.

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Most single-premium life insurance contracts become modified endowment contracts (MECs), changing how it's taxed to avoid abuse of its cash value tax deferment.

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SPLs are essentially one-time-payment life insurance policies, so the cost can be astronomical, making this option unsuitable for most consumers.

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HOW MONEYGEEK RANKED INSURANCE COMPANIES

To come up with our ranking scores, we incorporated data from J.D. Power, AM Best and NAIC. We also included our own affordability score, which we created by manually gathering thousands of quotes across major providers.

We used our qualitative research data to determine the best single-premium life insurance companies based on each company’s product offering and support features.

Best Overall: State Farm

State Farm

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Ranks high in customer satisfaction and financial ratings

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Has a range of products to suit different budgets or need levels

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Offers quotes online in minutes

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Does not offer coverage in Massachusetts

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Provides only term life quotes online

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Allows changes to your life insurance through an agent or by mail

COMPANY HIGHLIGHTS

State Farm is the best overall life insurance provider for single-premium life insurance policies and traditional policies as a whole. This ranking is based on the company’s high scores across categories, ranking first in customer service, claims handling, product offerings and financial stability.

Product Offering

Within its life insurance vertical, State Farm offers a wide selection of product types. There are policies for any need, from standard term life, whole life and universal insurance to single-premium and final expense life insurance.

State Farm offers single-premium life insurance to individuals between the ages of zero and 80, with a minimum coverage amount of $15,000. This policy includes a guaranteed cash value that grows tax-deferred, which can be paid in dividends or withdrawn later.

Beyond life insurance, State Farm also offers various other insurance types, such as auto, home, business, health, disability and liability insurance. Its range of products makes it one of the biggest insurers in the U.S.

Support Features

State Farm offers quotes online for some of its insurance products, but not all. For instance, it has quotes for term life insurance policies, but you must contact an agent for other types, such as whole life or single-premium life.

Policy Types Offered

  • Final expense
  • Term
  • Whole life
  • Universal life

Runner-Up: Northwestern Mutual

Northwestern Mutual

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Ranks high in customer satisfaction and financial stability

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Low customer complaint ratio

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Offers dividends for all policy types

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Does not offer quotes and applications online

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Requires most applicants to undergo a medical exam

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Has limited financial resources online

COMPANY HIGHLIGHTS

Given its low customer complaint ratio and above-average scores across MoneyGeek’s metrics, Northwestern Mutual ranks the second-best provider for single-premium life insurance policies and the best provider for whole life insurance policies.

Northwestern Mutual is more well-known for its financial planning services than its financial products and is the second-largest insurer in the world. To combine the concepts of protecting and growing, the company emphasizes a comprehensive and whole-picture approach that encompasses insurance and investments.

Product Offering

Northwestern Mutual offers a range of life insurance products, including term life, whole life, universal life and variable life. The company also offers single-premium life insurance, granted that the policyholder has a minimum coverage of $50,000 and is between the ages of zero and 75. When the policyholder dies, Northwestern Mutual gives its beneficiaries an option to receive funds in a lump sum or installments, an investment account or a combination of the two.

Beyond life insurance, Northwestern Mutual is popular for its financial planning services, offering retirement planning, estate planning, college planning and more.

Support Features

To inquire or apply for any of Northwestern Mutual’s life insurance policies, you must fill out its form online and wait to be contacted by one of its financial advisors. Otherwise, the company does not provide a quote or application form online.

Policy Types Offered

  • Whole life
  • Universal life
  • Term life
  • Whole life plus
  • CompLife
  • 65 Life
  • 90 Life

Most Affordable: MassMutual

Mass Mutual

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Low customer complaint ratio

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Offers guaranteed acceptance whole life to those ages 50 to 75

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Ranks high in financial stability

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Does not offer an online rate calculator

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Requires a medical exam for most policies

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Does not allow consumers to apply online

COMPANY HIGHLIGHTS

If you’re looking for a balance between cost and customer service, MoneyGeek ranks MassMutual as the most affordable single-premium life insurance policy provider. The company also ranks as the best provider of term life insurance.

MassMutual is a steadily growing company with a wide range of products and services. It consistently ranks among the top 10 largest life insurance companies. With a low customer complaint ratio and high financial stability score, MassMutual is one of the best options for those looking for a single-premium life insurance policy.

Product Offering

MassMutual offers various life insurance products, serving policyholders of different needs and budgets. MassMutual offers single-premium life insurance in the form of CareChoice One.

The plan covers long-term care expenses like nursing homes, hospital fees and other medically-related expenses. If long-term care is not required, a guaranteed death benefit is provided. A unique aspect of this policy is its surrender value, which increases over time and is paid out to a policyholder who decides to cancel their policy.

Support Features

If you are interested in a single-premium life insurance policy from MassMutual, you must contact an agent by filling out a form online. However, the company does offer quotes for term life insurance online.

You may qualify for non-tobacco rates if your tobacco usage involves no more than 24 cigars a year and you have a negative urinalysis specimen.

Policy Types Offered

  • Direct term
  • Healthbridge program term
  • Lifebridge program term
  • 10, 15, 20, 25 and 30-year term
  • Whole life
  • Universal life
  • Variable universal life

What Is Single-Premium Life Insurance?

Single-premium life (SPL) insurance is typically a form of permanent life insurance coverage that secures a guaranteed death benefit for beneficiaries through a one-time lump-sum payment. This single-payment life insurance can help simplify estate planning by eliminating the need for ongoing premium payments. Unlike traditional life insurance policies, which require regular monthly, quarterly, semi-annual or annual installments, SPL insurance is paid upfront and immediately accumulates a cash value.

Generally, a single-premium policy is advantageous for those who have accumulated wealth and seek to manage their estate efficiently. By paying a lump sum, policyholders can provide for their heirs without the ongoing burden of premium payments.

Types of Single-Premium Plans

Single-premium life insurance comes in different forms to meet diverse financial goals and coverage needs. Each type offers distinct benefits tailored to different investment and estate planning strategies.

Single-Premium Whole Life Insurance

This is the most common form of SPL insurance. The lump-sum payment in a single-premium whole life policy covers lifetime insurance and contributes to a cash value that accrues interest at a guaranteed rate. Over time, policyholders can borrow against this cash value or withdraw a portion, offering financial flexibility for future needs.

A single-premium whole life insurance policy may be ideal for individuals seeking stability and predictable growth without the need for active management of the investment component.

Single-Premium Universal Life Insurance

This flexible SPL insurance option allows policyholders to adjust the death benefit and vary premium payments if additional contributions are made. The cash value of single-premium universal life insurance grows based on a specified interest rate, which can sometimes adjust with market conditions, providing potentially higher returns than single-pay whole life insurance policies.

This type of single-pay life insurance may be best suited for those who appreciate flexibility in their life insurance coverage and can handle some variability in investment returns.

Single-Premium Variable Life Insurance

Not as common, a single-premium variable life insurance policy lets investors choose where to invest the policy's cash value, such as in stocks, bonds or mutual funds. This can lead to higher returns, but it also comes with increased risk due to market volatility.

This policy is appropriate for more experienced investors who understand market fluctuations and seek higher growth potential in their life insurance investments.

Single-Premium Indexed Universal Life Insurance

Some insurers may offer single-premium indexed universal life insurance, although it may not be as common as other types of single-premium life insurance plans. A single-premium IUL provides a blend of the growth potential associated with equity markets and the security of life insurance coverage. The cash value is linked to a stock market index, which can provide the potential for higher returns based on market performance. However, it typically includes a floor that protects against market losses.

A single-premium IUL policy may suit individuals seeking a balance between life insurance coverage and a more aggressive growth strategy for their cash value component.

While single-premium life insurance is typically offered in the form of permanent coverage, there are rare instances where an insurer might provide single-premium term life insurance. Such offerings provide a simplified coverage option for those looking primarily for a death benefit over a fixed term without the associated cash value growth.

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MONEYGEEK DICTIONARY

The nature of single-premium life insurance policies automatically makes them modified endowment contracts (MECs). A MEC is a different type of tax structure given to policies with funding that has exceeded federal tax limits, which can prevent the abuse of tax advantages commonly seen in permanent life insurance.

Once a policy is classified as a MEC, it is subject to a 10% tax penalty and any income taxes on the withdrawal if made before retirement age (59 ½ years old).

Pros and Cons of Single-Premium Life Insurance Policy

When evaluating a one-time payment life insurance policy, consider the potential benefits and challenges of this type of coverage. Single-premium life insurance offers a distinct approach to securing a financial future but comes with specific considerations that need careful assessment.

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Simplified Payments: The most notable advantage of single-premium life insurance is the convenience of a one-time payment. This approach eliminates future premium worries, ensuring the policy remains active without the risk of lapsing.

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Immediate Cash Value Access: Unlike traditional policies that gradually build cash value, single-premium life insurance provides immediate access to cash value. This allows policyholders to utilize their policy as a financial tool for loans or withdrawals soon after issuance, enhancing its utility for investment or liquidity purposes.

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Guaranteed Death Benefit: The full upfront payment of the policy guarantees the death benefit from the start, removing the risk of lapse due to non-payment. This certainty offers policyholders peace of mind, knowing their beneficiaries will receive the tax-free death benefit as planned.

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Substantial Initial Investment: The primary challenge of single-premium life insurance is the requirement of a large initial payment, which can be prohibitive for those without significant savings.

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Lack of Refund on Early Death: If the insured passes away soon after the policy purchase, there's no refund of the premium, which could result in a comparatively higher cost than a traditional policy that spreads payments over time.

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No Additional Contributions: Once the initial lump sum is paid, single-premium life insurance does not allow for further contributions, which can be a disadvantage if financial circumstances improve and additional investment is desired.

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High Surrender Charges: Early policy termination can incur high surrender charges, reducing the returned value and making it costly to cancel the policy prematurely.

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Tax Considerations: As Modified Endowment Contracts (MECs), these policies have particular tax implications, especially concerning loans and withdrawals, which could lead to potential tax liabilities.

Who Should Get Single-Premium Life Insurance

A single-premium life insurance policy does not suit everyone, as the high cost may be difficult to afford. However, it still depends on your situation. If you are estate planning or have a trusted financial advisor or attorney who can maximize your policy, then single-premium life insurance policies are a good option.

Conversely, a single-premium life insurance policy may not be a good idea if you want to add to your investment continuously because you only pay once. If you only have enough to meet the minimum, you may want to hold off or opt for a traditional policy.

Whether you decide to get single-premium life insurance will depend on your situation. Below are a few scenarios or reasons to get single-premium life insurance:

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    Your financial advisor recommends it

    It might be worth considering if you have a financial advisor who recommends getting a single-premium life insurance policy. They have an overview of your finances and the expertise to determine whether it’s a good idea for your estate and future.

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    You have enough money

    If you have enough pay to pay for a single-premium life insurance policy, you may want to purchase it. This way, you can have a guaranteed death benefit immediately instead of waiting for a certain period or a number of payments.

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    You’re okay with the tax implications and restrictions

    Single-premium insurance policies are taxed differently than traditional policies, which can mean hefty fees and tax implications if you withdraw funds earlier than maturity.

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    You are fully commited

    If you are intent on getting a death benefit right away to ease your mind and ensure the financial security of your loved ones, you may want to get single-premium life insurance.

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    You want a source of funds for long-term financial goals

    You can withdraw from your single-premium life insurance policy after a certain period, which will help you pay for retirement, a child’s college fund or emergency expenses. However, remember that it will decrease your death benefit.

How to Find the Best Single-Premium Policy

Finding the best single-premium life insurance policy requires a strategic approach to ensure you make the most of your substantial investment. Here are some tips to guide you through the process:

  1. 1

    Use a Single-Premium Life Insurance Calculator

    Start by utilizing a single-premium life insurance calculator to understand the potential returns and costs associated with different policies. This tool can help you estimate the future cash value growth and the death benefit amount based on your initial investment.

  2. 2

    Compare Single-Premium Life Insurance Rates

    Obtain single-premium life insurance quotes from several insurers. Comparing these quotes will give you a clearer picture of the benefits and costs offered by different single-premium life insurance carriers. Ensure you're looking at comparable features for a fair assessment.

  3. 3

    Review Policy Features

    Examine the specifics of each policy. Look for features that align with your financial goals, such as the rate of return on the cash value, the flexibility of accessing funds and the terms of the death benefit.

  4. 4

    Assess Financial Strength of Insurers

    Consider life insurance companies' financial strength and reputation. Strong financial ratings indicate a carrier's ability to fulfill policy benefits in the long term. This assurance is critical when you're committing a large sum upfront.

  5. 5

    Understand Tax Implications

    Since single-premium policies can be classified as Modified Endowment Contracts (MECs), it's important to understand the tax implications. Consult with a tax advisor to learn how a policy's tax status might affect your financial strategy, particularly concerning loans and withdrawals.

  6. 6

    Seek Professional Advice (Optional)

    Given the complexity and cost of single-premium life insurance, consulting with financial advisors and insurance experts can provide valuable insights. These professionals can offer personalized advice based on your financial situation, helping you determine if single-premium life insurance aligns with your estate planning and financial security goals.

By following these steps, you can effectively navigate the options and find the best single-premium policy that offers financial security and meets your needs.

MONEYGEEK EXPERT TIP

To find a single-premium life insurance calculator, you can typically start with the following:

  1. Visit Insurance Company Websites: Major life insurance providers often have various tools and calculators online. Search for tools specifically designed for single-premium policies on these sites.
  2. Financial Advisory Sites: Websites specializing in financial planning and advice may also feature a range of insurance calculators, including those for single-premium life insurance. These sites often provide additional insights into how to use these calculators effectively.
  3. Contact Insurance Agents: If online resources are limited, contacting an insurance agent directly can provide access to proprietary calculators. Agents can also provide personalized demonstrations on how to use these tools to forecast your policy’s performance.
  4. Insurance Comparison Platforms: These websites compile and compare different insurance products and usually offer calculators to help users evaluate various policy features side by side.

Using these resources, you can understand how a single-premium life insurance policy might fit into your financial strategy, helping you make a well-informed decision.

Compare Insurance Rates

Ensure you are getting the best rate for your insurance. Compare quotes from the top insurance companies.

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MONEYGEEK EXPERT TIP

Although single-premium life insurance is convenient because of its one-and-done nature, term life insurance may be the better choice if you are looking for affordability and effectiveness. This type of insurance ends after a specified period. Still, you can maintain a high benefit at a more affordable rate than whole life or single-premium life insurance.

Review MoneyGeek’s analysis of the best term life insurance providers to find a company that balances cost and quality of service.

FAQ: Single-Premium Life Insurance

If you’re still confused about how this type of policy works, review some frequently asked questions on single-premium life insurance policies below.

Which company provides the best single-premium life insurance?

Should I get a single-premium life insurance policy?

What is a single-premium life insurance policy?

How long does one premium payment cover in a single-premium whole life policy?

Is single-premium life insurance a good investment?

About Mark Fitzpatrick

Mark Fitzpatrick headshot

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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