Did You Know? Approximately 52% of Americans own life insurance, but many don’t realize its potential beyond death benefits.
Life insurance is commonly perceived solely as protection for loved ones after one’s passing. However, permanent life insurance, such as whole life, can serve multiple roles, providing tangible financial resources during your lifetime. Let’s explore how permanent life insurance offers more than just protection—it can be a valuable tool for financial flexibility.
Understanding Permanent Life Insurance
Permanent life insurance is designed for lifelong coverage and accumulates cash value over time. Here’s why this matters:
Tax-Deferred Growth Potential:
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- Cash value growth within the policy isn’t subject to immediate taxes, allowing your funds to accumulate more efficiently.
Lifetime Access to Cash Value:
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- You can access the cash value through policy loans or withdrawals, potentially covering financial needs such as education expenses, healthcare, or retirement income supplementation.
A Financial Buffer for Unexpected Costs:
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- Helps manage unforeseen expenses like caregiving, medical bills, or supporting family members.
Permanent Coverage:
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- Unlike term life insurance, which expires after a set period, permanent life insurance typically covers you for life, often extending to age 100 or beyond.
Diversification Beyond Market Investments:
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- Provides a financial option independent of stock and bond market fluctuations, contributing to overall portfolio diversification.
Potential for Compound Growth:
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- The policy’s tax-deferred growth may enhance the overall financial value through the compounding effect over time.
Looking Ahead
Permanent life insurance is more than an afterthought or just protection for loved ones; it’s a proactive financial tool providing benefits throughout your lifetime.
Curious if this approach fits your financial goals? Schedule a complimentary meeting today to discuss how permanent life insurance might align with your needs.
Policy loans will reduce available cash values and death benefits and may cause the policy to lapse or affect any guarantees against lapse. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject ordinary income tax.
Most life insurance policies are subject to medical underwriting, and in some cases, financial underwriting. Life insurance products contain fees, such as mortality and expense charges and surrender charges, and are not suitable for everyone. Optional riders may involve an additional annual fee. Proceeds from life insurance are generally income tax free to a properly named beneficiary. Life insurance agents do not give tax or legal advice. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Product and feature availability may vary by state.
