How Does Single Premium Life Insurance Work? 
Single premium life insurance involves paying one premium and no more while having life insurance coverage for life . It will be a modified endowment contract for tax purposes meaning it still has favorable tax treatment on the death benefit but annuity-like treatment on cash values . You do n't want to use single premium life if you plan to accessing cash value later . There are a wide variety of product types and different reasons to use them . A popular method within a narrow niche is to buy single premium life instead of an annuity if you are unlikely to need to access it for income in retirement as that the tax treatment and value of the asset at death will be more favorable . Another is to buy a single premium guaranteed universal life policy and fund with a single premium . The only issue is that reserving changes and low interest rates have impacted insurers so severely , this is an inefficient method of estate liquidity funding . Level pay guaranteed universal life is far better . 