Many Americans believe that owning life insurance means paying premiums to an insurance company, in order to receive the protection of a death claim benefit paid to beneficiaries. But this is an accurate description of only one type of life insurance – term insurance.
Before automatically choosing a term life policy, you may want to take the time to learn more about the “hidden advantages” of whole life insurance. You may be surprised to learn that there are a variety of ways that this type of permanent life insurance can be used to achieve specific financial goals while still protecting the interests of your loved ones and your business.
Benefits for Your Lifetime
In addition to a death benefit that can protect your beneficiaries, whole life insurance offers you a living benefit. When premiums are paid, part of the funds go into a cash reserve that accumulates on a tax-deferred basis, and you generally can access this cash reserve at any time, for any purpose. For example, the cash reserve can be tapped for paying college expenses, generating retirement income, or providing cash for short-term emergency needs. In whole life insurance, your coverage can remain in force as long as you live, provided you pay required premiums into the policy.
Americans are encouraged to discover the true value of life insurance and take an active role in securing their futures. Below are ten benefits of whole life insurance that may be hidden, until you look closer.
1. It’s your money – Whole life insurance, particularly the kind that pays dividends, is one of the best kinds of life insurance for creating cash values.
2. Choose how to use dividends – You have the option of taking whole life dividends in a variety of ways – in cash, to reduce future premiums, or to increase the insurance death benefit.
3. Take loans on attractive terms – You can tap into cash values, often without paying taxes, and use the money for any purpose that you wish. The net cost of borrowing often is very low in whole life, and loan repayment terms are flexible.
4. Have more money to spend in retirement – Having whole life insurance can increase your retirement income, because it is an efficient way to ensure a legacy to your heirs without encumbering retirement assets.
5. Count on it for life – You can’t outlive whole life. It will provide benefits as long as you live, because coverage does not end after a pre-determined period.
6. Assets can be creditor-proof – Life insurance benefits are protected from claims of creditors in most states.
7. Transfer assets tax-efficiently – Life insurance death benefits are generally received income-tax free. Your beneficiaries will not be left with income tax obligations to settle.
8. Have something to show for it – Unlike term insurance, whole life provides cash values or other features (called “non-forfeiture options”) that will make sure your coverage has value over time.
9. Protect your business – Whole life is a preferred way to protect a small business against the loss of key employees. It also can provide the funding for business buy-out agreements.
10. Increase disability protection – Many whole life policies offer disability waiver benefits, which means they will pay your premiums if you become disabled!
It’s always a good idea to learn the details and carefully compare options before making an important purchase such as life insurance.
John “Jake” Akoury, MBA, CLTC, AAMS, and John G. Balzer, JD, CLTC, RFC, are Registered Representatives of Park Avenue Securities LLC (PAS), 140 Kendrick Street, Needham, MA , 02494. Securities products and services offered through PAS. Financial Representative, The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian. The Bulfinch Group is not an affiliate or subsidiary of PAS or Guardian. Life insurance offered through The Bulfinch Group Insurance Agency, LLC, an affiliate of The Bulfinch Group, LLC. The Bulfinch Group, LLC, is not licensed to sell insurance. PAS and the representative do not provide legal advice or services.
The Bulfinch Group
781-876-5880 x222 / x224
JAkoury@bulfinchgroup.com
JGBalzer@bulfinchgroup.com
PAS is a member of FINRA, SIPC.
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