Whole Life Insurance: Why You Should Get It?

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By RobertBass

For many people, when planning for retirement, the common course of action is to sign up for a life insurance plan. Such a policy can help one save for retirement—provided, of course, that he purchases the right kind of plan.

Many agents promote permanent life insurance as a way to save for that stage in a person’s life when he is no longer working. Whole of life insurance is one of the most common forms of permanent insurance, and a viable reason for its popularity among policyholders is the fact that they don’t ever have to worry about the coverage expiring, provided they keep on paying their premiums.

So what makes such a policy the top choice for many people? And why should you consider signing up for whole life insurance? The following are just a few of the benefits you’ll get.

  1. The premiums are fixed.

Although whole life premiums might seem higher compared to other policies, especially in the first few years, you’ll start to see the advantages as the years pass. What this means is that your premiums will stay the same through the years and thus will seem much more affordable in the long run, especially since this would also mean guaranteed payouts in your retirement years, at fixed rates.

  1. You’ll also get fixed benefits for your beneficiaries.

If you’re the breadwinner in your family, you’ll still be able to financially provide for your family even if you are no longer physically here via the death benefit included in a whole life policy. This refers to a guaranteed sum of money that will go to your heirs or beneficiaries, and it’s a financial benefit that will remain constant for the rest of your life.

  1. You can get certain tax advantages.

In addition to the death benefits that will go to your beneficiaries, you’ll also enjoy certain tax-related benefits, in that your cash values will grow on a tax-deferred basis. Think about it: those tax-free assets of yours will be faster and easier to access than those other assets that might take some time to settle in probate court. The money could also save your heirs from having to pay for your funeral expenses.

  1. There might be potential dividends.

When you sign up for whole life insurance, there’s the chance that you might receive annual dividends out of your policy. Although such payouts are not guaranteed, they are a way for insurance companies to share with their policyholders. You can then decide to reinvest such dividends into your policy to further build up your cash value.

  1. You’ll have a source of funds for retirement.

If you’ve built up a considerable cash value for your policy, you can direct that money to be part of your retirement pot. The said cash value is often tax-free and insulated from fluctuations in the market. In other words, it is a guaranteed asset you can rely on for when you reach retirement age.

Making Financial Arrangements for the Future

Making financial plans for the future is crucial if you want to preserve your assets so you can leave them to your heirs and look out for the financial wellbeing of your family. This way, you can be sure that you and your family will be ready for whatever surprises, welcome or unwelcome, that might come your way.