Insurance Claim

What's your motivation behind securing your retirement future? Is it financially stability? Freedom to travel? Or how about long term care? Regardless the reason, it's critical to plan for this transition. One highly recommended product for retirement is permanent life insurance.

Permanent life insurance is an umbrella term which refers to life insurance plans that don't expire and that combine a savings portion along with death benefit. The savings portion builds cash value which the policy holder is able to borrow funds against. In other instances, the owner is able to withdraw the cash value which is usually used to meet retirement goals or fund educational needs. There are two sorts of permanent life insurance.

a) Whole life insurance policy
b) Universal life insurance policy

Statistics show that 93% of Americans admit that life insurance is necessary. However, those same statistics also show that nearly 95 million American adults do not have insurance policies. This is about 41% of the entire U.S population. The 41% of insured Americans breaks down to 61% of men and 57% of women as policy holders. The harsh reality is that even those insured Americans lack the proper policies necessary for retirement funding. Permanent life insurance is the ideal product for planning during and after life.

When you buy universal insurance, there are premiums you are expected to pay monthly. Part of these premiums will go into the cash value account which grows based on policy dividends, earnings and interest from sub-accounts. The main benefit is that you are able to borrow against the cash value without paying taxes. Certain rules and regulations apply to accessing funds tax-free, the advice of a professional would be essential at this point.

If you invest in permanent life insurance policy early enough, you are able to enjoy a lot of benefits during retirement. Take an example where you invest $8,700 in premiums annually to a permanent policy. If your investment earns an interest of 8% per annum, after 30 years your investment is projected to grow to about $600,000 after expenses. Don't forget that you could borrow against that amount tax-free.

Attributes of whole life insurance policies

Due to its longevity many consider permanent insurance as a risk free investment, making it a popular investment option.

- Cash value- for every premium you pay, a fraction is taken to the cash value. This policy on your death using the cash value. If you have financial issues you can borrow a loan against the cash value.

- Premiums- the premiums do not change from the start of the policy until death regardless of any changes in the economic environment.

- Tax benefits- as a policyholder, you are not supposed to pay any taxes from your accumulated cash value.

- Death benefit- with this policy, you have the assurance that there will be no reduction of the death benefits. There is also no tax addition.

- Dividends- this policy gives you the privilege of earning dividends that are given in cash but you can purchase a new insurance policy with them. However, dividends have no guarantee and they may change yearly.