Life Insurance has two purposes. First, there is the purpose of death benefit protection. Second there is the benefit of potential to build cash value, then the money can be used to help supplement their retirement incomes on a tax-advantaged basis.
The premiums paid will both pay for a death benefit and the rest will cover the investment potential. Over time, the policy can build cash value and then you can access the cash value through loans and withdrawals that are typically income-tax free to use as supplemental income. At the insured’s death, the remaining death benefit will be paid to the beneficiaries.
There are two types of major insurance - term and whole life. Term life is available at any age and about any length of time – 20 or 30 years. The term will coincide with the years your family would be most financially vulnerable along with an amount they would need if you were no longer there to provide for them. The payout would replace your income and help your family pay for services you perform now and would in the future.
Whole life insurance provides lifelong coverage and includes an investment component known as the policy’s cash value. The cash value grows slowly, tax-deferred, meaning that you won’t pay taxes on its gains while they are accumulating. You can borrow money against the account but you will reduce the death benefit.
The premium remains the same for as long as you live and the death benefit guaranteed, and the cash value account grows at a guaranteed rate.
Contact Debbie Boyd for more information here or call 979-220-3018.
Money Strategies with Debbie Boyd on 1380AM The BIZ
Debbie is licensed with our agency. Jeff DeNight discusses insurance on her show each month!Debbie Boyd: Long-Term Care & Life Insurance Professional