Whole life insurance is usually preferred as permanent life insurance which offers a lifetime protection. In addition, your premium will be locked; the insurance company will never increase or cancel your policy. A whole life insurance policy can bring up to many benefits beside death benefit guarantee. Despite the higher premium rates and lifetime commitment, it could be a great solution if:
- You want to leave money to your loved ones or a charity: Life insurance allows you to leave a more money than you could through a taxable investment
- You have an up-to-date will: life insurance can be used to cover the potential liability assets like the family cottage so it doesn’t have to be sold.
- You have paid off your mortgage or other debts
- You have taken care of your retirement plan; and you want to build more cash for your retirement. A whole life insurance policy will bring you a living benefit “cash value” with higher interest rates than your saving account and safer than other investment options.
- You have taxable investment
- You want your estate to pay less tax: by redirecting money from taxable investments into life insurance policy, you pay less tax today and in the future.
A whole life insurance policy is one of the most tax-efficient way to build and transfer your estate. The tax-free death benefit creates an instant inheritance. Also, the policy offers tax-advantaged growth that you can access during your lifetime. You may be able to put a policy in place with no additional out-of-pocket expense. Simply redirect some of your money from taxable investments to pay the premium for a permanent life insurance policy. The policy will do the rest.
Talk to an advisor to have more details and consultation so you can find a policy that works best for you.