Life insurance is not an investment. It is an alternative asset class.
Life insurance has been around for a very long time and not only has an amazing history, but also an amazing track record. In fact, no Canadian has ever lost a dollar due to a failed insurance company.
Since the very nature of life insurance is to provide financially for loved ones upon the death of insured individuals, life insurance embodies the spirit of thinking long term and enables the transfer of wealth to future generations. Other unique and often ignored values of Participating Whole Life Insurance are it’s living benefits.
Here’s how to make life insurance work for you using it’s living benefits:
Access your money
Instead of having your money tied up in long term investments, you can borrow money from the growing cash values inside your insurance policy. Whole Life Insurance policies allow you to maintain liquidity of your money so you can use it as opportunities and needs dictate.
Redirect interest payments
Control (almost) every penny of hard earned money and have it add to your wealth instead of deplete it. When you borrow money from the cash values inside your insurance policy, you’ll need to pay it back just like any other loan. What makes it unlike any other loan, however, is that when you pay the money back with interest as required, the interest payments contribute to the guaranteed growth of the cash values. With most insurance companies, by the time you reach 100 years of age, the cash values inside the policy will match your death benefit amount.
Pay less tax
The tax-free benefit of life insurance is part of what makes this a unique asset. With the guaranteed growth of the cash values inside your insurance policy being tax advantaged, you can keep and use more of your money. So enjoy the tax-advantaged growth of your money. Growth that is safe, uninterrupted, and locked-in.
Life insurance was used as a primary savings vehicle in the early 20th century because of its built in guarantees, liquidity in the form of cash values and the stability the private insurance sector was built upon. Given the rise and fall of the financial industry over the past 100 years, life insurance has largely been forgotten or disregarded for the very purpose for which it was created.
What better way to put the principles of financial stewardship (that is taking care of others) into action than with a specially designed life insurance policy that provides policy owners with control, liquidity, use, and equity of their money also?