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Single premium life insurance is a type of policy where you pay one large premium instead of monthly premium payments to receive life insurance benefits, like the death benefit payout.1 The death benefit is the amount of money given to beneficiaries once the policyholder passes that can help ensure financial stability for loved ones.
Single premium life insurance and traditional life insurance (offered at Aflac) provide similar benefits, but the payment schedule is different.
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There are a few different kinds of single premium life insurance, like single premium whole life insurance and single premium variable life insurance. The main difference between these two life insurance plans is how the cash value functions.2
Cash value is a feature of some life insurance plans where a portion of the premium payment is put into a savings-like account that grows over time tax-deferred. If this feature appeals to you, cash value is offered in Aflac Whole Life Insurance plans.
The cash value grows in a single premium whole life insurance plan at a pre-determined fixed interest rate and functions the same way as Aflac Whole Life Insurance plans. Because there is less variability involved in this kind of life insurance plan, it is viewed as less of a risk.3 On the other hand, single premium variable life insurance invests the cash value into various portfolios. This is known as active investing and has the potential for greater reward or loss.4, 5
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Get StartedNow that you understand the single premium life insurance definition, we can explore the benefits and drawbacks of this type of life insurance plan.
Single premium life insurance can grant beneficiaries a substantial death benefit. While every life insurance plan functions differently and death benefit capabilities vary, single premium life insurance can be helpful if you are able to pay a large sum of money upfront because you can get a policy that will pay your loved ones a sizable payout.2
Additionally, you may be able to access the cash value in these life insurance plans in the form of a loan, with a few extra hurdles compared to a traditional life insurance plan with cash value.
With single premium life insurance plans, you are required to pay a sizable fee upfront to guarantee benefits will be available. The bare minimum investment for these plans is somewhere around $5,000, which isn’t financially possible for everyone and offers a minimal death benefit payout.4
There are also more tax limitations involved when borrowing the cash value from a single premium life insurance plan than a whole life insurance plan.4 Once premium payments reach a specific value, they qualify as a modified endowment contract with a different tax structure. This value is determined by undergoing the seven-pay test.
The seven-pay test of a single premium life insurance policy measures how much money is spent on premiums over seven years. If the amount spent on premiums in seven years exceeds the total cost of a policy, it fails the test and qualifies as a modified endowment contract.4 Due to this legality, all single premium life insurance plans are modified endowment contracts. These contracts face greater withdrawal penalties, making it more challenging to utilize the cash value.4
With our whole life insurance plans, you may be able to borrow against the cash value in the form of a loan with little to no penalties. We recommend chatting with an agent to understand your life insurance options better if cash value appeals to you.
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Wondering what life insurance policy is best for you? Find out which type of life insurance can offer you the best coverage.
Life insurance premiums can vary based on the term length and your age. Learn how life insurance premiums are calculated and whether they’re tax-deductible.
Wondering what life insurance policy is best for you? Find out which type of life insurance can offer you the best coverage.
Life insurance premiums can vary based on the term length and your age. Learn how life insurance premiums are calculated and whether they’re tax-deductible.
1 U.S. News - What Is Single-Premium Life Insurance? Updated February 2, 2026. https://www.usnews.com/insurance/life-insurance/what-is-single-premium-life-insurance. Accessed February 25, 2026.
2 Insuranceopedia - Which Type of Life Insurance Policy Generates Immediate Cash Value? Updated October 30, 2025. https://www.insuranceopedia.com/life-insurance/which-type-of-life-insurance-policy-generates-immediate-cash-value. Accessed February 25, 2026.
3 Insurance Geek - What Is Single Premium Life Insurance? Complete Guide & Analysis. Updated June 29, 2025. https://www.insurancegeek.com/life-insurance/single-premium/. Accessed Accessed February 27, 2026.
4 Value Penguin - What Is Single Premium Life Insurance? The Pros and Cons. Updated July 15, 2025. https://www.valuepenguin.com/single-premium-life-insurance. Accessed Accessed February 25, 2026.
5 Value Penguin - How Variable Life Insurance Works: Pros and Cons. Updated January 29, 2026. https://www.valuepenguin.com/life-insurance/variable-life-insurance. Accessed Accessed March 2, 2026.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.
Aflac life plans – A68000 series: Term Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68200, A68300 & A68400. In New York, Policies NY68200, NY68300 and NY68400. Whole Life Policies: In Arkansas, Idaho, Oklahoma, Oregon, Texas, Pennsylvania & Virginia, Policies: ICC1368100. In Delaware, Policy A68100. In New York, Policy NYR68100. B60000 series: In Arkansas, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Not available in Delaware. Q60000 series/Whole: In Arkansas, Delaware & Oregon Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Pennsylvania, Policy Q60100MPA and in Texas, Policy Q60100MTX. Not available in Virginia. Q60000 series/Term: In Arkansas, Idaho, Oklahoma, Oregon & Texas, Policy ICC18Q60200M. In Delaware, Policy Q60200M. Not available in Virginia.
Receipt of accelerated death benefits may affect eligibility for public assistance programs. Benefits may also be taxable and are not expected to receive the same favorable tax treatment as other types of accelerated death benefits that may be available.
Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (NAIC 92908).
In AR, DE, ID, OK and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.
Aflac does not offer universal, variable universal life insurance, single premium life insurance, or single premium variable life insurance.
Coverage/plan levels may not be available in all states, including but not limited to NJ, NM, NY, VA or VT. Benefits/premium rates may vary based on plan selected. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions.
Aflac WWHQ | Tier One | 1932 Wynnton Road | Columbus, GA 31999
NY | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211
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