One of the most often asked consumer questions about Whole Life insurance is, “What is the biggest benefit to owning a Whole Life Policy?” It’s hard to rest on just one big advantage, since Whole Life comes with many positive facets, but sit back, relax, and breathe. Here’s one good answer.
The Cash Value
When you pay the premium on your Whole Life policy, a portion of that premium is placed in a separate account that will continue to increase and offer you liquid assets whenever you need it. Those liquid assets are your cash value.
What does the cash value do for you?
Actually, whatever you want it to do! Your cash value will gain compounded interest every year, tax-free, regardless of what’s happening in the stock or mutual fund markets-Guaranteed.
And here’s another huge benefit of cash value – you have access to borrow against your cash value any time you want it, for any reason (down-payments, college tuition, home improvement or a much-needed vacation!) at any age, again, tax free!
You’re the Bank
When you need or want a loan, the answer is always “yes.” By the way, you also set the re-payment terms or you decide never to return the loan at all (most people do choose to re-pay the cash so it’s available the next time they may need it)!
In addition, to borrowing against your cash value, there are other ways to access your money. You can withdraw sums of your money or surrender (cancel) your policy for the cash (though taxable as income).
Much More
Though the cash value is one of many attractive attributes of Whole Life Insurance, there are other advantages like, retirement income, a death benefit, and leaving a family legacy. Talk to one of our expert agents to learn about the many ways to utilize an insurance policy.
Also, listen to President Patrick Donohoe’s Podcast, The Many Uses of Life Insurance Dividends to find out more about the uses of Cash Value Insurance!
FAQ
Q: What is the primary reason for considering whole life insurance as part of a financial strategy?
A: The primary reason for considering whole life insurance is its unique ability to provide lifelong coverage, build cash value over time, and offer a combination of protection and wealth accumulation in one policy.
Q: How does whole life insurance differ from other types of insurance policies?
A: Whole life insurance differs from other policies by offering permanent coverage, cash value growth, and the potential for dividends, making it a versatile tool for long-term financial planning.
Q: Can individuals benefit from whole life insurance in achieving both short-term and long-term financial goals?
A: Yes, individuals can benefit from whole life insurance as it offers protection for loved ones in the short term and serves as a financial asset for wealth accumulation and legacy planning in the long term.
