Life insurance is a multi-purpose investment tool. No longer is it a vehicle solely designed to leave cash for your descendants after you are deceased. Life insurance now has the flexibility to provide “living benefits” as well as death benefits. More advanced life policies can even help you to accumulate more financial investments without you adding any additional money. They are useful tools that have a place in a well assembled investment portfolio.
The most basic form of life insurance is term life. It has a prescribed life span,( i.e. 10 years) and pays a flat amount, which is listed on the face page of the policy. Offers the lowest premium rates, but builds no equity. Premiums increase respective to age and are renewed annually. These policies are most useful for: young married couples, as they are just beginning their careers, purchasing homes and building their families. If one member was to meet with a premature demise, it could be financially devastating for the other at this stage of building.
Whole life policies work for the most part like term policies, with the fundamental difference being a built in equity accumulation feature. These policies have a little higher premiums, because part of the premiums is used to maintain the policy, while the remainder goes into an invest account, where it not only accumulates, but earns interest and/ or dividends. These policies are preferred for new parents. As your child grows, so does their savings fund, which can be borrowed against for college.
If you would like to discuss life policies and their benefits, please call us at (678) 257-2215 or email us from the contact page.