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What is the current thought on this? Probably not very good at current interest rates, correct? Just looking for other diversifications with locked in guaranteed growth rates. You don't find much information over the internet. I guess they want to get you in to spend your valuable time listening to a sales pitch. Just give me the rates, goshdangit.
I would be curious too...the "planned giving" department at my high school alma mater really likes single premium life policies as a way to "remember" St. Xavier High School as part of alumni estate planning.
@Anonymous wrote:What is the current thought on this? Probably not very good at current interest rates, correct? Just looking for other diversifications with locked in guaranteed growth rates. You don't find much information over the internet. I guess they want to get you in to spend your valuable time listening to a sales pitch. Just give me the rates, goshdangit.
Unlike an annuity, it's a life insurance product, thus the rate for one need not apply to another. It's up to a licensed insurance agent to decide whether: you qualify for it; it's an appropriate product suggestion.
It's most commonly sold to the unagressive consumer who values safety of principal and ease of transfer of proceeds to a beneficiary. For instance: a single senior citizen who has 100K sitting in the bank earning .035 interest that is only needed in case of emergency. The $350 interest earned funds a yearly trip to the casino (not there's anything wrong with that!) with friends from church. When this person dies the 100K, or some part of it, will eventually pass to an heir. Moving that 100K into a SPL might result in a 120K or 125K death benefit (dependent on age/sex/health) paid immediately to an heir. A nice gain for the beneficiary.
In certain scenarios it's a very useful financial tool. But it's really not an investment vehicle and not a good suggestion for most people.
Disclaimer: I am not offering investment advice.
Insurance is not an investment. These products are great only for the sales person due to high fees.
Buying term insurance and investing the rest in low cost index fund is better financial option.
Insurance products should never be looked at as investments. The only insurance product I would consider is a Single Premium Immediate Annuity and only if I were retired and wanted a guarenteed income stream. If you are curious about investing, I highly recommend a book called "The Bogleheads' Guide to Investing."