Single-Life Payout

A single life payout is a type of life insurance policy that pays a lump sum to the beneficiary when the insured dies. There is no cash value accumulation component like a traditional life insurance policy, so the death benefit is the only payout.

Key features of single life payout policies:

• Lump sum payout: A single life payout policy pays out a lump sum benefit upon the death of the insured.
• No cash value: Unlike traditional life insurance policies, single life payout policies do not have a cash value accumulation component.
• Lower cost: Single life payout policies are typically more affordable than traditional life insurance policies.
• No loans: You cannot borrow against the cash value of a single life payout policy.
• Higher taxes: The death benefit from a single life payout policy is taxable income for the beneficiary.

Reasons for choosing single life payout:

• Affordability: Single life payout policies are typically more affordable than traditional life insurance policies.
• Simplicity: Single life payout policies are simpler to manage than traditional life insurance policies.
• Lack of cash value: If you do not need the cash value accumulation component of a traditional life insurance policy, single life payout policies may be a better option.

Things to consider:

• Limited benefits: Single life payout policies do not offer the same range of benefits as traditional life insurance policies, such as the ability to borrow against the cash value.
• Higher taxes: The death benefit from a single life payout policy is taxable income for the beneficiary.
• Death benefit: Make sure the death benefit is large enough to cover your needs.

Overall, single life payout policies can be a good option for people who need a simple and affordable life insurance policy.