Whole Life Insurance is great. It can be an assurance upon a person’s passing and it could also be an investment that one can pay regularly and then get back in large amounts. Whatever the purpose and need of one person may be, Whole Life Insurance is very beneficial to young, old, big, small, or any type of family. Consider these three things upon thinking of getting yourself and your loved ones a Whole Life Insurance.
One great thing about Whole Life Insurance is because it can accumulate cash values. These amount is the guaranteed death benefit. However, some people choose to withdraw these funds before they actually die therefore forfeiting the death benefits. Many people see Whole Life Insurance as an investment that they could pay for and allow to grow until such a time they decide to use the accumulated money before they die.
Such way may be alluring to many, having been able to use the money that is supposed to support their dependents upon their passing. This decision comes with a downside. When the insured finally dies, the surviving spouse and children may actually have no basic financial support plus they would have to resume the financial responsibility the dead leaves such as mortgages, debts, and other monetary obligations.
Choosing to cash out one’s Whole Life Insurance should be given thorough thought. Despite the allure of big cash value, think about what happens to your family after you leave this world. Make sure that the money you take out is actually helpful.
Whole Life Insurance offers a lot of benefits to the insured individuals and its dependents. Examples of this coverage are:
- Funeral expenses
- Estate planning
- Surviving spouse income
- Supplemental retirement income
- Buy-sell agreements
- Death of key person
- Supplemental executive retirement plans (S.E.R.P.)
- Deferred compensation
The benefits cover not only personal concerns but business ones as well. These are great help to families with young dependents and those who only have one income earner.
Why should you know about taxation? Is not it something that the insurance company is only concerned about and not yourself? In fact, it is important to have a clue about it. Some actions you may decide on your insurance can be in your advantage or slightly not in your favor. And this little factor is tax. Whole life insurance is income-tax free. However, when you claim your cash values before the insured individual’s death, then the money becomes taxable. Not only could Whole Life Insurance become subject to tax when cashed out before demise but also when you cancel or surrender the insurance prior the death of the insured person.
Either you want to insure your future during your life on earth or after you leave it, Whole Life Insurance is an excellent investment. Talk to your insurance agent about this and foresee how much greatness and help it can give yourself and your dependents.