Moving Money from Bank to Single-Premium Life Policy
Example: EquiTrust Wealth Max Bonus Life - benefits and considerations.
Video: Single-Premium Life Insurance
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The Opportunity
Many people keep large amounts of money in bank savings accounts earning very little interest (often less than 1%). What if there was a better alternative?
Consider This Example:
You have $100,000 sitting in a bank earning 0.5% interest. After 10 years, you'd have about $105,000.
What if instead, you moved that money into a single-premium life insurance policy?
What is a Single-Premium Life Policy?
A single-premium life insurance policy allows you to make one lump-sum payment instead of ongoing premiums. Products like EquiTrust Wealth Max Bonus Life are specifically designed for this purpose.
Deposit Bonus
Many of these policies offer a deposit bonus (for example, 15% bonus on your initial deposit - exact numbers vary by product and state). So your $100,000 becomes $115,000 immediately.
Index-Linked Growth
Your cash value can grow based on market index performance (like the S&P 500), with downside protection. You won't lose money from market crashes.
Life Insurance Coverage
You also receive a death benefit that pays your beneficiaries tax-free if something happens to you.
Benefits
Immediate Bonus: Get a deposit bonus right away (percentages vary by product).
Higher Growth Potential: Potential for better returns than bank savings accounts.
Principal Protection: Your money is protected from market losses (subject to insurance company strength).
Life Insurance: Death benefit for your family.
Liquidity Options: Access to cash value through loans/withdrawals (subject to policy terms).
Important Considerations
Long-Term Nature: These are designed for long-term use (10-20+ years). Not for short-term savings.
Surrender Period: Early withdrawals may incur surrender charges (typically decreasing over 5-10 years).
Contract Terms: You must understand the specific policy terms, including how to access funds and any restrictions.
Not FDIC Insured: Unlike bank accounts, these are backed by the insurance company (not FDIC).
Example Scenario
Mary has $200,000 in a bank savings account earning 0.5% annually.
She moves it to a single-premium life policy with a 15% bonus (example only - actual bonuses vary):
- Immediate value: $230,000 (including bonus)
- Potential for index-linked growth (e.g., 5-8% annually in good years)
- Protection from market losses (0-1% floor)
- Death benefit for her family
- Access to cash value if needed (subject to policy terms)
Note: This is a simplified example for educational purposes only. Actual products, features, and bonuses vary.
This is an example concept only. Actual products, features, and bonuses vary by company, product, and state. Always consult with a licensed professional to understand specific contract terms before making a decision.