Whole Life Insurance – A Savings Account While You’re Alive, and Permanent Life Insurance When You’re Gone!
For many people, there isn’t any question about whether or not to buy life insurance. Rather, the bigger question for them is which kind of life insurance to buy.
The two main types of life insurance a person can buy are permanent life insurance and term life insurance. Permanent life insurance includes whole life insurance, variable universal life insurance and universal life insurance policies. Term life insurance is a limited product in that it provides a death benefit only, and will only cover the policy owner for a specified period of time. It is like renting a life insurance protection for certain number of years like 10, 20 or a maximum of 30 years.
In short, with term insurance, you have to die before anyone can reap the benefits of your term life insurance policy. With permanent life insurance and especially whole life insurance on the other hand, you and your family can also benefit and enjoy the cash value built up inside the policy while you are still alive (in addition to receiving a death benefit when you pass away). Whole life insurance not only offers permanent death benefit protection, but a great tax advantage savings option as well.
Both options can provide similar amounts of death benefit coverage. But only whole life insurance provides coverage that lasts until the day you die, no matter when and where that takes place. Plus, only whole life insurance provides benefits that no other types of savings and investments can ever provide, tax advantages. Whole life insurance builds up a tax-deferred cash value that you can take out through loan strategy to avoid any kind of income taxes. There are no other savings or investment tools that will allow you take money out tax free. In a retirement account you are paying taxes whenever you take the money out of the plan. Roth IRA’s and Roth 401K’s can allow tax free withdrawal but only with limitations on how much you can contribute, and they provide no permanent death benefit if you die. Municipal bonds may provide tax free income but also provide no permanent death benefit, and are subject to estate taxes if one is wealthy upon their passing. And unlike other investments, whole life insurance has a value that grows at very attractive rates of return without all the stock market risk. It’s an asset that gives you an option to either cash out, use it as a permanent life insurance, or both.
When you are buying a whole life insurance policy, you are creating an asset very much like a home or a real estate. As long as the premium is paid, you are able to use this asset one day either as a college savings plan, for retirement income or for a death benefit when you die. Just like real estate, whole life insurance is very tax efficient regarding income tax, but unlike real estate a whole life insurance benefit is income and estate tax free if your policy is structured in the correct manner. Real estate can be a very poor inheritance or legacy vehicle as it will be subject to income tax (if you have used up the cost bases as depreciation for taking income deductions while you’re alive) and estate tax if you fall within the estate tax limit. When you combine life insurance with real estate, you are creating very powerful asset set that will not only provide you with a solid income tax benefit, a decent rate of return. It can also provide you a potentially tax efficient transfer of your assets to your family and the next generation upon your death.
You may have heard that cash value life insurance is more expensive than term life insurance. That is like comparing buying a house as expensive over renting a one bed room apartment cheap. There is no apple to apple comparison between whole life insurance and term life insurance as your chances of collecting death benefits on term insurance is only 1%. While cash value life insurance is substantially higher priced, the ability to use your cash value while you are alive is very much like using the equity in your home.
Once you delve into the details, you’ll realize that though the premiums of a whole life insurance policy may be higher, you ultimately won’t be wasting your money. It’s a guarantee you simply do not get with term life insurance. Plus, with whole life insurance you can use dividends to help offset the premium or you can use the paid-up feature. The cash value at any time will purchase a specific amount of insurance with no more premiums due. In addition to paying the premiums, the cash value will continue to accumulate and grow. So with the right whole life insurance policy, from the right whole life insurance company, you only pay for a certain number of years but the coverage is still in effect for the rest of your life.
Life insurance premiums, on the whole, have decreased in recent years. So even if you’ve had a life insurance policy for a while, it might make sense to compare the policy you own to one you might purchase now. There may be some very real savings in a newer life insurance policy. To compare whole life insurance quotes from a variety of reputable whole life insurance companies, and make sure that you’re getting a whole life insurance quote with the premiums and benefits that make the most sense for you, please call (877) 972-3262 or simply complete this short from now.
Whole life insurance policies are rarely offered through employer groups, those policies are most often term life insurance policies. So it’s up to you to seek out and purchase the coverage you and your family need. Local life insurance agents are representing only one life insurance Company and primarily paid by commission from that one life insurance company. Their main interest will be selling policies to individuals from just that one life insurance company.
Take the first step today, and request a whole life insurance quote online from BeamaLife. We’ve taken the hard work out of requesting, comparing the top 100 life insurance companies. No agents, no broker, just the right whole life insurance policy, at the right premiums for you and for your family’s security and comfort.
