Posted on: 19 August 2018Share
Holding a life insurance policy is important for adults, especially those who have minor children or a spouse who relies on them financially. A life insurance policy provides an important financial safety net in the event of an untimely death. However, some insurance policies can also be viewed as investments. A whole life insurance policy combines the security net of a life insurance policy while also having several features that make it a wise investment. Some of the top benefits of purchasing a whole life insurance policy include the following.
Guaranteed Insurance Coverage
When a person purchases life insurance, they want to be covered in the event of their death. However, with term life insurance, your life insurance policy only exists for a set period of time. When the term comes to an end, you will no longer have a valid life insurance policy. As you get older or develop health conditions, it can be much more expensive or nearly impossible to purchase a new term life insurance policy. When you buy whole life insurance, you do not have to worry about any of these things, since whole life insurance provides guaranteed insurance coverage up until your death.
Ability to Borrow Against Your Policy
After purchasing a whole life insurance policy, you will begin paying premiums on the policy. After a while, your premiums will build up to be a large sum of money. In the event that you quickly need a lot of cash for any reason, you have the ability to borrow money from your whole life insurance policy. You will not be responsible for paying any taxes on money that you borrow from your whole life policy, and you can pay back what you take out at a low interest rate.
Your Money Will Grow
The money that you pay in through premiums will continue to grow year after year. Reputable insurance companies that offer whole life insurance plans pay out dividends yearly. Unlike other types of investments, such as a 401(k), mutual funds, or stocks, the money invested in a whole life insurance policy is protected, so you are not at risk of losing the money that you have paid in if the stock market crashes or there are other market problems.
Opportunity to Leverage Your Whole Life Insurance Policy to Grow Wealth
With a term life insurance policy, you pay your premiums and that is it. But, since you can freely borrow against your whole life insurance policy, you will have easy access to capital to invest in other ventures, such as real estate. Your whole life insurance policy can serve as a source of financing for wise investments, helping your grow your wealth.
To learn more, reach out to companies like Daniel Deck.