Building Wealth with Life Insurance

What is most important in your life? The answers vary from person to person. People encounter financial milestones throughout life—buying a house, paying for college, etc. Most people say their loved ones and health or well-being are the most important things in their life. If you are the primary provider for your family, you are your family’s biggest asset. Though human life is invaluable, you can assign a monetary amount to it through the purchase of life insurance. Life insurance can be an important tool in your investment arsenal to build or transfer wealth. Depending on the type of life insurance you choose, you may be able to access your money early—through a partial settlement or accrued cash value—or you can ensure your beneficiaries continue living a good life if something unexpectedly happens to you.

Two of the most common reasons people buy life insurance are:

• You may die too soon or
• You may live too long

However, many don’t consider the purchase of life insurance as a way to make more money, build wealth and transfer wealth. Let’s learn more about this interesting aspect of creating financial security.

Building Wealth

Do you consider yourself wealthy? How long would it take for you to acquire your desired level of wealth? Financial health and wealth creation are reasonable life goals. However, to reach such goals, you need to define what wealth means to you. It may mean different things to different people. Some people say the meaning of wealth is to have enough to fulfill all their needs and meet financial aspirations. Some people want to be a billionaire by the time they are 40 years old while others want enough money to travel worldwide.

Building wealth is a long-term activity that requires setting goals and careful planning and effort from you. Do not be discouraged if you are older; there are many life insurance products that offer simplified underwriting, meaning there is no physical or blood work required.

Reasons to use Life Insurance for Wealth Creation

Life insurance can help in wealth building either directly by giving you access to immediate money or by allowing you to save money. Both are equally important for consistent wealth creation.

There are two types of life insurance: permanent life and term life. Term life insurance has cheaper premium payments and lasts for a specified period (the term). When that term is up, you may usually be eligible to reapply for coverage, however the premiums most likely will be higher, as you will be older. Permanent life insurance never expires and it has a death benefit for your beneficiaries. Importantly, it builds cash value that you can use during your lifetime.

• You have worked hard for your money and investments. When you die, some of your wealth may be lost due to taxes. The proceeds of life insurance can be passed on to your spouse, partner or children completely tax-free. This can help your family reap the benefits of your good financial decisions.
• In case of an untimely death, there could be debts yet to be settled. Hard-earned money and savings may have to be diverted towards clearing that debt. By purchasing a life insurance policy, you can ensure that all debts are paid off without causing financial hardship to your family.

Life Insurance as a Wealth Benefit

You may be surprised to learn that life insurance is a fast and great way to build wealth compared to other investment vehicle. Everyone has different levels of risk and goals; you must consider yours carefully. If you have trouble understanding insurance terminology our life insurance agents are here to answer your questions. Some of the benefits of life insurance include:

• It is a great asset in any portfolio, especially if you want diversification.
• It can provide a steady income in retirement.
• Death benefit is tax-free to your beneficiaries.
• Dependent on the type of permanent life insurance policy you select, your accrued cash value may not subject to market losses.
• If you are self-employed, this makes it easier for you to invest.

One of the biggest advantages of life insurance is that with the right policy, you get access to a portion of your invested money during your lifetime to pay for assisted living or care expenses you may encounter. This helps to protect your other investments, like your house, you have worked so hard to build. You can also create and save your wealth for your loved ones.

Choose the Right Life Insurance

Life insurance is a popular way to increase after-tax wealth and a chance to pass on more money to heirs. However, it is of extreme importance to select the right policy. Spend some time finding the most suitable option. If you want more flexibility in paying the premium or want the money to be invested in specific assets, there are many choices available in the market.

If you are just starting out with wealth planning and building, just understand it takes continuous and consistent efforts but it will pay off. Using the right strategy and planning, it is possible to build substantial wealth fast. Life insurance is a great way to do this and offers many advantages. It not only provides life coverage but also provides tax-free death benefits. Let our team of advisors help you build wealth with the right life insurance product.