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people, permanent life insurance isn’t as important as other things may be. I generally recommend that younger people direct their money into retirement accounts rather than insurance, unless there is an actual need for it.

As compared with other types of whole life policies, straight life offers the greatest amount of permanent death protection, but the least amount of savings per dollar of premium paid. For most people, especially families, straight life is the best choice for permanent insurance coverage because the emphasis is on the death benefit, not the savings feature.

Many people may think that once you start paying the premiums for a straight life policy, then you are stuck unless you cancel the pol- icy. That’s not necessarily true. Once a policy has accumulated some cash value, if you want, you can “trade in” the policy for another, paid-up policy that has a lower death benefit. As long as your policy has a change-of-premium provision, you can do this at no cost.

Single-Premium Whole Life As the name implies, a single-premium life policy is paid for at its inception with one premium. The policy is then in force for the rest of the insured’s life, unless it is otherwise canceled by the insured. The single-premium policy (SPWL) is, as a rule, not well suited for younger people and young families. Because of its investment attributes, the SPWL is appealing to those people looking for a tax- sheltered investment vehicle.

As with other types of cash-value policies, the earnings and inter- est of an SPWL accumulate on a tax-deferred basis. While the policy also provides life insurance coverage and will pay a death benefit upon the insured’s death, the amount of the coverage is usually the minimum allowed under the IRS’s rules. Generally, the death benefit is treated as an added bonus to those who purchase this type of cov- erage. As with other types of policies, the death benefits will pass through to the beneficiaries on a tax-free basis. Minimum premiums are usually $5000, but most people put in more, thus garnering a larger amount of tax-deferred earnings.

While this type of policy sounds great, it’s not without a catch. If you needed to take a loan from your policy, or just make a withdrawal,

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