As the stock market has endured several difficult years, many people have quickly realized their risk tolerance is not as high as they initially believed. In fact, at this time, you may be searching for a place to set aside safer and more secure money than stocks. If you already have a term life insurance policy or are considering applying for one, you might want to consider a whole life policy instead. Unlike term life insurance, whole life insurance gives you coverage for your entire life and the chance to build cash value. Whole life insurance allows you to save a portion of each premium payment into a tax-deferred, low-risk portfolio managed by an insurance company, along with the opportunity to borrow against your policy at any time while still protecting your loved ones.
With whole life insurance, you will get coverage for your entire life. Your beneficiaries will be protected, and your policy will stay in effect regardless of health issues. You won’t have to worry about affording the premiums as you get older because the premiums will remain level throughout your life (depending on the contract). These advantages make whole life insurance a wise choice, but a whole life policy has more to offer.
Having the advantage of cash value makes whole life insurance an excellent choice. After you take out your whole life policy, a portion of each premium payment goes towards your cash value. As the years pass, the percentage of each premium payment placed into your cash value increases. Your cash value is invested in low-risk investments. As with most insurance companies, there is a minimum guaranteed return that you will receive regardless of what happens in the market. Having the advantage of cash value not only gives you the comfort of financial security, but you will gain borrowing power against your cash value.
There are also tax advantages that come with whole life insurance. With whole life insurance, the return on your cash value grows tax-deferred. This means you will not have to pay taxes on what you earn until you decide to withdraw it. Not only will your money stay tax-deferred until you decide to use it, but you can also choose to borrow against it. Incidentally, the interest rates for your whole life insurance policy loan are usually lower than current market interest rates. All of these benefits are in addition to supplying your loved ones with the security of an income tax-free death benefit if you choose to keep your whole life policy in force.
Choosing a whole life insurance policy will give you the peace of mind and security of life-long protection. If you currently have a term life insurance policy, we can show you how simple it is to convert to a whole-life policy. If you don’t have any life insurance coverage, now is the best time to start and start letting your insurance premiums work for you!