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URL:  http://boards.fool.com/i-wonder-if-a-single-premium-whole-life-insurance-29376820.aspx

Subject:  Re: money market alternatives Date:  6/23/2011  1:41 PM
Author:  tjscott0 Number:  69175 of 75540

I wonder if a single premium whole life insurance could be the answer.

http://www.diversefinancial.com/website_article.pdf

WHILE the recent Tax Act effectively axed many tax shelters, it hardly touched the tax breaks provided by life insurance. In particular, the single-premium policy has emerged as a popular taxadvantaged investment: You make a single payment up front - usually a minimum of $5,000, but in practice often $50,000 or $100,000 or more - that buys you a chunk of life insurance and an investment fund that appreciates tax-free as long as you keep the policy in force.
There are two basic types of contracts. In a single-premium whole-life policy, the insurer guarantees your principal. Some companies fix the initial return - current rates range from 7 to 8
1/2 percent - for a given duration, usually one to three years. After that, returns fluctuate at the company's discretion, although they are supposed to reflect prevailing market rates.

Single-premium policies are also pitched as a way for retirees to increase their tax-free estate, and still have access to their money. For example, a 60-year-old woman who pays a $25,000 premium
today with the USAA Life Insurance Company would get a policy with an initial death benefit of $54,500; after 10 years, at a net return of 8.81 percent, the cash value of the policy would stand at
$58,179 and the insurance portion at $67,488. Any money received from a policy loan would not affect the taxability of Social Security benefits.


http://www.bizjournals.com/sanantonio/stories/2000/06/12/dai...
USAA Life Insurance Co.'s whole-life policies have been ranked No. 1 by insurance analyst A.M. Best Co. The life insurance policies had the best dividend history out of more than 50 leading insurance companies and generated the most cash-value return for policyholders. The rankings were published in a recent issue of Best's Policy Reports.

I admit that I'm scratching my head on how they are able to pay 7 or 8% on the cash value.

Anybody out there heard about dividends on single premium life insurance policies?
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