When it comes to life insurance, you might automatically think of Term Life, which provides a sizable death benefit for a relatively, fixed premium. But as the name suggests, Term Life only protects you for the term of the policy. A 30-year policy is cheap when you’re young and healthy, but premiums are significantly higher once that policy runs out.
Term and Permanent Life have different strengths and weaknesses, so here are the top 10 reasons you should consider Whole Life:
- Unlike Term Insurance, which most view as an expense, Whole Life is an asset that provides many additional benefits.
- Whole Life typically pays a stable and consistent dividend compared to many other Life and investment products. You can consider Whole Life a fixed income asset which increases in value over time. When compared to other safe, fixed income alternatives, the IRR (internal rate of return) is very attractive.
- If purchased when young and healthy, the premiums are relatively low and the death benefit can increase significantly over one’s life.
- You can mitigate the premium by allowing the dividends to reduce the premium, thereby resulting in no future premiums due.
- Permanent Life Insurance is one of the best tools for estate planning, especially when placed into a Life Insurance Trust. It provides liquidity and a tax preferred death benefit.
- As an added bonus, Whole Life Insurance Cash Values are protected from creditors in many states.
- If you purchase the Waiver of Premium Endorsement, in the event of total disability, you no longer have to pay the premium but the death benefit and cash value will remain.
- If properly designed, with Whole Life you can receive a tax free income stream in the future by withdrawing up to basis and then borrowing beyond. There are not very many ways to receive tax free income and still be able to maintain life insurance protection. Amazing.
- Whole Life Insurance works great with Buy/Sell agreements between Partners to provided needed protection and future cash which can be accessed.
- Permanent Life Insurance will be there when you need it, not just for a limited period of time like Term Insurance. Purchasing Whole Life insurance guarantees your family’s financial future.