In this discussion of whole life insurance, we are making assumptions that the whole life product/asset is one that is properly designed by an agent/advisor and issued by a mutual insurance
company that uses the non-direct recognition of loans.
So the question to consider is “Why Whole Life?”
Whole life insurance offers the following benefits:
A savings component that incorporates tax-free compounding that become more significant the longer the policy is held
Guaranteed death benefits that can be distributed in a tax-free lump sum to beneficiaries
Tax-free and penalty-free access to cash value if withdrawals are made in the form of loans which you can use for any purpose without additional underwriting or qualifications
The premiums are level and predictable over a predetermined/fixed payment period
Can be used in businesses to attract or retain valuable personnel
Accelerated death benefits are available to the insured in case of chronic or terminal illness
Whole life insurance is ideal for:
High-net worth individuals, high-income earners or middle-income earners who want to diversify their tax and inflation risks
Individuals who want guaranteed protection with returns that are not correlated to the equities market or subject to market volatility
Businesses/business owners who need an additional source of liquidity and cash flow without the hassle or delays associated with additional underwriting or application requirements for other types of funding (loans or equity funding)
Can be used in businesses to attract or retain valuable personnel
When an ideal candidate for whole life insurance begins to ask, “why whole life?” and then discovers the many compelling benefits that whole life has to offer, the next question should be how can I make whole life work for me?”