Quick Facts
- You will need a single premium policy to obtain a life insurance policy with immediate cash value
- Only permanent life insurance policies, like whole and universal life insurance, offer cash value
- There are whole and term life insurance policies with no waiting period if you simply want immediate life insurance coverage
If you’re in a rush to find a permanent life insurance policy, you might be wondering which type of life insurance policy generates immediate cash value. Life insurance waiting periods can cause issues if you suddenly pass before your cash value or death benefit is available.
Waiting for a product you’ve already purchased can be frustrating, even in the case of life insurance. This article will highlight the immediate cash value life insurance options, so that you won’t have to worry about any waiting periods.
Are you ready to discover which types of life insurance policies build cash value? Continue scrolling or enter your ZIP code above to acquire free quotes from the top life insurance companies near you.
Table of Contents
Read More: Types of Life Insurance
Where can I get immediate cash-value life insurance?
For starters, the life insurance policies that offer immediate cash value will be permanent life insurance policies such as whole or universal life insurance. For those that aren’t familiar, term life insurance doesn’t have a cash value component although the death benefit sometimes has a waiting period as well.
Read more: Can I cash out a term life insurance policy?
The cash value component is typically not available immediately because only a portion of your permanent life insurance policy will go toward the cash value component. Similar to a traditional checking or savings account, the value of your account will slowly accrue over time, assuming that you don’t make any withdrawals.
So, how do you get a life insurance policy with immediate cash value? You would need to purchase a single premium life insurance policy to have immediate cash value available. If you purchase a single premium life insurance policy, the policy itself is no different than if you were to pay monthly premiums.
The major difference is that your policy goes into effect immediately, including your cash value. Keep in mind that you will be paying more in premiums than your cash value is worth. This is because permanent life insurance policies still have a death benefit that you’ll need to cover.
Read more: What is the waiting period for life insurance?
Which life insurance companies are best for immediate cash value policies?
Many companies that offer permanent life insurance will offer single premium payment options but, for whatever reason, many companies don’t advertise this option. Of the life insurance companies that offer single premium life insurance, many are considered smaller companies.
These are some of the life insurance companies that advertise having immediate cash value:
- State Farm
- Illinois Mutual
- Oxford Life Insurance Company
- Western Southern
- Prosperity Life
- ELCO Mutual
As you can see, most of the companies listed above aren’t particularly well-known nationwide. State Farm is the major outlier with a significant market share in the life insurance industry.
In fact, State Farm barely falls within the top 10 whole life insurance companies by market share. The other companies listed above weren’t even within the top 20.
Top 10 Whole Life Insurance Companies by Market Share
| Companies | Direct Written Premiums | Market Share |
|---|---|---|
| Northwestern Mutual | $10,517,115,452 | 6.42% |
| Metropolitan Group | $9,821,445,953 | 6.00% |
| New York Life | $9,925,848,300 | 5.68% |
| Prudential | $9,128,805,060 | 5.57% |
| Lincoln National | $8,769,303,774 | 5.36% |
| MassMutual | $6,854,713,057 | 4.19% |
| Aegon | $4,809,856,650 | 2.94% |
| John Hanco*ck | $4,640,905,017 | 2.83% |
| State Farm | $4,633,004,963 | 2.83% |
| Minnesota Mutual Group | $4,422,100,028 | 2.70% |
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Keep in mind that not all companies will advertise their payment options. If you’re looking for a good company that offers single premium life insurance, the large companies listed above would be a safe place to start. You won’t have much to lose other than a little time.
Read more:
- Nationwide Life Insurance Review
- Prosperity Life Group Life Insurance Review
Should I buy life insurance with immediate cash value?
Purchasing a life insurance policy is almost never a bad idea as long as you are prepared and communicate with your beneficiaries. This is especially true in reference to single premium life insurance policies.
According to the Insurance Information Institute, some life insurance policies go unclaimed because beneficiaries are unaware of the policy or the company no longer exists. These are merely a couple of reasons that could deter you from purchasing a single premium life insurance policy. (For more information, read our “How to Find an Unclaimed Life Insurance Policy“).
How does a single premium policy make matters worse? If the policyholder were to die unexpectedly without informing their beneficiaries of the life insurance policy, there are fewer ways to identify that a policy was in place. And if you reviewed monthly bank statements, there wouldn’t be any transactions from an insurance company to alert loved ones of an existing policy.
In addition, there may not be a mail trail without any new statements. In either case, a policyholder who doesn’t inform their beneficiaries of the policy could be doing everyone a disservice. On the other hand, paying for a life insurance policy in advance could lead to other financial issues.
If the insurance company is sold or collapses, you might have a difficult time getting a refund or the benefits you’ve paid for. This is why it might not be a great idea to buy a single premium life insurance policy from a smaller company like those listed above.
Other Options for Immediate Life Insurance
While your options are limited for life insurance policies that offer immediate cash value, there are other life insurance policies that are immediately available without cash value.
There are different options for life insurance with no waiting period. If you’re set on a whole life insurance policy, you can secure one without a waiting period on the death benefit, but the cash value component won’t be available until you make some payments.
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Similarly, term life insurance is available with no waiting period. Whether you select whole or term life insurance, these will most likely need to be no exam life insurance policies which tend to be slightly more expensive. You will also have different payment options such as level, increasing, or decreasing premiums.
What does level refer to in level term insurance? Whether you’re buying a term or permanent life insurance policy, the term level simply means that the premiums won’t change over time.
Many whole life insurance policies have decreasing premiums, so that the insurer secures the bulk of the premiums sooner rather than later. Therefore, level premiums could be relevant for either type of policy.
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Case Studies: Immediate Cash Value Life Insurance Options
Case Study 1: Single Premium Whole Life Insurance
Mary is in need of a life insurance policy that generates immediate cash value. After conducting research, she decides to purchase a single premium whole life insurance policy.
By paying a lump sum premium upfront, Mary’s policy goes into effect immediately, including the cash value component. Although she pays more in premiums than her cash value is worth, she is relieved to have immediate coverage without waiting periods.
Case Study 2: No Exam Term Life Insurance
John wants to secure immediate life insurance coverage without going through a medical exam. He explores his options and discovers that some no-exam term life insurance policies offer immediate coverage.
Although these policies do not build cash value, John values the convenience of quick approval and the absence of waiting periods for the death benefit.
Case Study 3: Single Premium Universal Life Insurance
Sarah is interested in a life insurance policy that offers immediate cash value while providing flexibility in premium payments. She decides to purchase a single premium universal life insurance policy.
With this type of policy, Sarah pays a lump sum premium upfront, which allows her to enjoy immediate cash value benefits. Furthermore, she can adjust her premium payments and death benefit as needed.
Life Insurance with Immediate Cash Value: The Bottom Line
It’s not always practical to purchase life insurance with immediate cash value unless you can afford to pay for an entire policy upfront. There are other options for life insurance without a waiting period.
By now, you should know which type of life insurance policy generates immediate cash value and where to acquire one. Before you go, enter your ZIP code below to obtain free quotes from the best life insurance companies in your area.
Frequently Asked Questions
Which type of life insurance policy generates immediate cash value?
Single premium whole or universal life insurance policies are the types that generate immediate cash value. However, you can also secure immediate life insurance coverage with a no exam term or whole life insurance policy.
Where can I get immediate cash value life insurance?
Immediate cash value life insurance is typically offered by permanent life insurance policies such as whole or universal life insurance. These policies accrue cash value over time, similar to a traditional checking or savings account. To have immediate cash value available, you would need to purchase a single premium life insurance policy.
Which life insurance companies are best for immediate cash value policies?
While many life insurance companies offer permanent life insurance with immediate cash value, most of the companies that advertise this option are smaller companies. However, some larger companies, like State Farm, also offer single premium life insurance. It’s recommended to start with larger, well-known companies when looking for single premium life insurance options.
Should I buy life insurance with immediate cash value?
Purchasing a life insurance policy, including one with immediate cash value, is generally a good idea as long as you communicate with your beneficiaries. However, there are potential drawbacks to consider, such as beneficiaries being unaware of the policy or the insurance company facing financial issues. It’s essential to weigh the pros and cons before deciding.
Are there other options for immediate life insurance?
If you’re looking for immediate life insurance coverage without cash value, you have options like no waiting period term life insurance or whole life insurance policies with no waiting period on the death benefit. These policies may require no medical exam but could be slightly more expensive. It’s important to explore different payment options and coverage types to find the best fit for your needs.
Will life insurance cover LifeFlight?
Which of the following is an example of a limited-pay life policy?
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Written by:
Kristen Gryglik
Licensed Insurance Agent
Kristen is a licensed insurance agent working in the greater Boston area. She has over 20 years of experience counseling individuals and businesses on which insurance policies best fit their needs and budgets. She knows everyone has their own unique needs and circ*mstances, and she is passionate about counseling others on which policy is right for them.Licensed in Massachusetts, New Hampshire,...
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Written by Kristen Gryglik
Licensed Insurance Agent
Reviewed by:
Eric Stauffer
Licensed Insurance Agent
Eric Stauffer is an insurance agent and banker-turned-consumer advocate. His priority is educating individuals and families about the different types of insurance coverage. He is passionate about helping consumers find the best coverage for their budgets and personal needs.Eric is the CEO of C Street Media, a full-service marketing firm and the co-founder of ProperCents.com, a financial educat...
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Reviewed by Eric Stauffer
Licensed Insurance Agent
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