Single Premium Life Insurance Northwestern Mutual

Single Premium Life is a good choice of permanent life insurance when a lump sum of cash (from a savings or retirement account, an inheritance, an insurance payout, or even a lottery windfall) is available and permanent life insurance coverage is desired.

Depending on the age of the insured, a one-time premium payment may secure several times that amount in coverage immediately. Over time, the amount of protection may increase until it is many times greater than the amount paid into the policy.

A cash value exists as soon as your policy becomes effective.

The gains on your policy’s cash value grow on a tax-deferred basis.

Any cash value withdrawn through loan or surrender would be taxed more heavily than cash withdrawn from other kinds of permanent life insurance policies. This plan is most appropriate if you plan to keep it in force, with values intact until death.

Your beneficiaries generally receive the death proceeds income tax free (under current laws).

Single Premium Life Insurance Specifications

Features

Guaranteed death benefit.

Guaranteed minimum cash value.

Guaranteed to not require additional premiums.

Eligible to receive dividends.

Issues Ages

Ages 0-85

Policy Sizes

Minimum amounts: $25,000, Ages 0-85.

A smaller amount is allowed if the premium (including policy fee, class and flat extras) is in excess of $10,000.

Maximum amount: Based on underwriting and insurable interest limits.

Death Proceeds

Original guaranteed face amount plus any dividend additions. Any policy debt (outstanding loans and accrued interest) will be deducted from policy proceeds.

Dividend Options*

Increase policy values

Accumulate at interest

Receive in cash

*Dividends are not guaranteed.

Policy Loans

Most of the accumulated cash value in a permanent life insurance policy is available for loan.

Variable loan rate option.*

With “Direct Recognition” the percentage of cash value borrowed affects amount of dividend credited.

Any outstanding loan and accrued interest balances are deducted from the policy process upon surrender or death.

*In Arkansas, Single Premium Life policies will have 5%.

Because of the lump sum premium payment this policy is considered a Modified Endowment Contract (MEC), and therefore will be subject to different taxation issues than other life insurance policies including taxation of cash withdrawals that occur prior to age 59 1/2.