Life Insurance Living Benefits

Life Insurance — Reaping the Benefits While You are Living The most obvious purpose of life insurance is protecting the family’s financial security in the event of a policy holders death. Yet many are unaware that with a little planning and proper decision-making, the holders of certain whole life insurance policies can use funds for emergencies, investing and other opportunities.
Facts You Should Know about Whole Life Insurance: Whole life insurance builds reserves as the policy owner pays premiums. This reserve approximates the policy’s guaranteed cash value and can normally be accessed by the policy owner as a policy loan or it can be surrendered for its cash value. Other life insurance plans, such as universal life insurance and variable life insurance, can also build cash values. Just keep in mind that the cash value created in all permanent life insurance plans are not guaranteed. The ability to take policy loans and withdrawals, may be an invaluable benefit in an emergency.but remember that taking a loan or withdrawal reduces the policy’s death benefit on a dollar-for-dollar basis.
The Advantages of Whole Life Insurance: • liquidity — The policy owner has contractual rights that enable him or her to access the policy’s cash value • tax-deferred cash value growth — Cash value is taxdeferred until it is withdrawn • guarantees — Traditional whole life insurance offers cash value, death benefits, and premiums that are guaranteed. • safety — Closely regulated, the cash value in life insurance policies has historically proven safe. • investment management — Life insurance companies use skilled investment management personnel and broadly diversified investment portfolios • collateral — Life insurance policies can be used as collateral or as security for personal loans, generally up to 100 percent of the policies’ cash value. • no risk — not subject to the market risk associated with investments. • protected funds — exempt from creditors and a policy owner’s bankruptcy • permanent protection — Premiums for whole life insurance can be payable for the insured’s entire life • not part of probate — Life insurance proceeds are not part of the probate estate • exempt from state inheritance taxes — unless payable to the insured’s estate. • favorable tax treatment — Death benefits are generally received free of income tax • forced savings — Regular savings through cash value growth are encouraged as an additional advantage for those purchasing a whole life insurance policy. Sounds pretty good right? Well before you run out and purchase a whole life policy. There are a few more things you want to keep in mind:

  • Life insurance is for protection – not just investing.
  • No one cares about your financial situation more than you do,
  • Yet no one may be able to help you more than a licsensed professional who can answer your questions and help you in selecting the best life insurance coverage for you and your family.

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