There are several reasons. With cash value life insurance such as whole life, you do not have to worry about prmiums going up as you get older and most likely to need the insurance. The cash value can help provide a buffer if your financial situation changes. Every whole life policy as nonforfiture options in the contract. The cash value can help conserve a poliy utilizing thes options. If you cannot afford the premiums any longer the cash value can be used to buy a reduced paid up policy according to a schedule in your policy. You can also stop making payments and the policy will continue in-force with the cash value buying extended term insurance until the cash value is used up. You can cash surrender the policy and get some equity. When you deduct the cash value of a policy from the total premiums you pay you will see that in the long run cash value insurance was far less expensive than buing term. You can also take a loan on your cash value that is very interest friendly and will have no repayment schedule, although it is always best to at least pay the interest since the amount of the loan would be deducted from the face amount when you die.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Why buy Cash Value Life? Why not?
Cash value life insurance provides a tax favored pot of money that the insured can use at their choice. This pot of money inside your policy can be called upon in times of need to provide funds for emergencies, education expenses and really, anything you want. The best part of that is you don't have to ask permission, you don't have to explain your need to that guy in the cubicle that looks down his nose at you to decide if you're worthy. You just call and it's wired to your account, no questions asked and you use it for what you want.
For some people who understand, that aspect alone is very liberating. And it's been that way a long while. JC Penny, the actual JC Penny, used the cash values in his life insurance to help pay his payroll and keep his stores open during the great depression.
There are other valuable aspects about cash value life I could detail but I'll stick to this one for now. I'll bring up another positive on another post.
President, The Firm of Steven H. Kobrin, LUTCF, 6-05 Saddle River Rd #103, Fair Lawn, NJ 07410
I am a life insurance salesman who believes that cash value life insurance should be a last resort. This product is first and foremost a way of taking care of your loved ones, your obligations, your business, and your favorite charities. Financial security means a lot here, and life insurance is a very cost-effective way to provide that.
This means that someone should never buy a cash value life insurance if it means short-changing the beneficiary on survivor benefit.
Having said that, cash value life insurance can be a superb way to insert guaranteed cash into your financial portfolio. I frankly have not come across another product that can match it in terms of guarantees.
On top of that, favorable tax treatment make that cash build up very attractive. There are a few other vehicles that make cash – and again this is the non- guaranteed portion of the policy – available so quickly, and with such lenient tax treatment.
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Cash value life insurance provides a tax favored pot of money that the insured can use at their choice. This pot of money inside your policy can be called upon in times of need to provide funds for emergencies, education expenses and really, anything you want. The best part of that is you don't have to ask permission, you don't have to explain your need to that guy in the cubicle that looks down his nose at you to decide if you're worthy. You just call and it's wired to your account, no questions asked and you use it for what you want.
For some people who understand, that aspect alone is very liberating. And it's been that way a long while. JC Penny, the actual JC Penny, used the cash values in his life insurance to help pay his payroll and keep his stores open during the great depression.
There are other valuable aspects about cash value life I could detail but I'll stick to this one for now. I'll bring up another positive on another post.
This means that someone should never buy a cash value life insurance if it means short-changing the beneficiary on survivor benefit.
Having said that, cash value life insurance can be a superb way to insert guaranteed cash into your financial portfolio. I frankly have not come across another product that can match it in terms of guarantees.
On top of that, favorable tax treatment make that cash build up very attractive. There are a few other vehicles that make cash – and again this is the non- guaranteed portion of the policy – available so quickly, and with such lenient tax treatment.