The death benefits of a term life insurance policy bring valuable peace of mind and financial security for your loved ones after you’ve passed on. But some of the lesser-understood features of permanent life insurance can actually provide benefits you can enjoy while you’re still alive. Keep reading to find out how a permanent life insurance policy can form a cornerstone of your wealth-building strategy.

The Wealth-Building Benefits of Life Insurance

The Cash Value of a Whole Life Policy

Term life insurance policies are relatively affordable, but they only provide coverage for a limited time. When the coverage term ends, so does the coverage, and the insurer just keeps all the premiums you’ve paid. Permanent life insurance, on the other hand, includes an investment component, with a cash value that grows over time. A well-designed insurance policy allows you to borrow these funds and enjoy special tax advantages you won’t find with other investment vehicles.

Borrowing Against the Policy

The low-interest rates offered by a good permanent life insurance policy give you access to funds you can use to power your other investments. For instance, some insurers offer loans with interest rates as low as 2%, and some policies even allow interest-free borrowing. Taking that money and investing it in a mutual fund with even modest returns of 5% nets a 3% gain using someone else’s money.

The Tax Advantages of Permanent Life Insurance

The death benefits of a life insurance policy aren’t taxable, but neither are the dividends from your investments. If managed correctly, a well-designed life insurance policy allows for tax-free growth, which can either be enjoyed by your beneficiaries or accessed through a low-interest loan.
 

From their headquarters in Boca Raton, FL, Seeman Holtz Comprehensive Advisory offers personalized retirement planning and life insurances to a diverse range of clients across the country. They understand how important a well-designed policy can be, and their proactive client service campaign will rejuvenate your financial well-being with a level of service you won’t find anywhere else. Their team features a well-rounded portfolio of specializations to maximize your capital. Visit their website for more on their insurance services, follow their Facebook for regular updates, or call (800) 325-8907 to discuss your options with a friendly, skilled professional.