I love life insurance….
You probably don’t hear that much. Most people dread life insurance, but know they need it. So what’s different about me? I’d say I’m one of lucky one’s who has learned the “inside scoop” about life insurance, and how to use it for your benefit. While most people buy it all the same, boring way, I do it almost the opposite.
Today life insurance is the most important asset I own. I own as much life insurance as I possibly can, and can’t seem to purchase enough. Is it because I am so altruistic, and want to pass on a lot of money to family? Thats part of it, but I’m a little more selfish than that. It serves many purposes, but here are a few of the reasons I use it:
- Cash Value- I buy high cash value whole life insurance. By doing so, I actually have most of my money available day 1, and I can use it anytime I want. The cash value is safe, and grows very well. I can access this money any time I want to, and I have. I use it just like a bank. I borrow from it and pay it back. I’ve used it for cars, medical expenses, and I’ve even purchased real estate entirely from my cash value.
- Growth- With over 200 years of history, life insurance is one of the most predictable places to have money, and the growth is very competitive. You can read more about life insurance returns, and safety in our post about life insurance investing. The best part, however, is my ability to take those dollars and put them to better use (like my real estate) any time I want to.
- Death Benefit- There is not much more comforting than knowing my family will have what they need if I die. Even though I use this tool as a better way to handle our family finances, it also gives me the coverage I need, and it seems to be a bonus.
- Taxes- I do not like taxes…. who does? Life insurance is tax free and I can use it tax free. The death benefit then passes to my family tax free. It has the most tax advantages of any asset out there. That is exactly why big banks and corporations by it by the billions.
These are a few of the many reasons I love life insurance. It has been a great foundation for my family’s finances, and has offered a lot of piece of mind… both in where to save/invest, as well as how to protect my family.
Jake
Jon September 20, 2012 at 5:05 am
Its short but informative about investing in life insurance. It helps people to decide whether to get or not. At least in this article it gives an overview about what life insurance is. Thank you for giving your insight or advantages of life insurance.
Brandy January 18, 2013 at 3:16 pm
” Life insurance is tax free.” Do you mean you put it in their tax free (similar to a 401k)? or do you mean it grows tax free?
Jake January 18, 2013 at 3:46 pm
I mean it is tax free. Unlike the 401k, a whole life insurance policy has tax free growth, and can be used tax free in the future, and the death benefit is passed on tax free. There is a caveat there though. If you cancel the policy, the growth can be taxable, so it needs to be handled properly.
The Insurist January 21, 2013 at 2:40 pm
Jake…I couldn’t have said it better myself. Thank you. With most of the financial world constantly portraying whole life and other forms of permanent insurance as the devil, you’ve outlined exactly why and how it can be beneficial.
Check’s in the mail!