Whole Life Insurance Policies - Coverage for Life
Whole life insurance policies provide financial coverage for the "whole of life" of the insured, from the date of policy inception until the date of death. Whereas term life insurance covers the insured for a specific period of time (the "term"), whole life insurance covers the insured for life (as long as premiums are paid).
Whole Life Insurance Policies - More Than Just Death Benefits
Although most people purchase life insurance to protect loved ones in the event of death, whole life insurance policies provide some other powerful financial planning opportunities during life. In addition to traditional death benefits, specially-structured whole life insurance policies can provide dividend-based wealth building, tax-favored accumulation and borrowing features, and retirement income.
As dividends accrue against the cash value of the whole life insurance policy, they are credited on a tax-favored basis to the policy account. Thus, the policy holder doesn't pay tax on the cash increase until withdrawal as a structured retirement payment. If the insured dies, the death benefits pass to the beneficiary on a tax-free basis.
Whole Life Insurance Policies - The Foundation for Financial Success
Beyond these standard features, whole life insurance policies can also be structured to act as the foundation for a personal wealth-building solution! Using specially-designed, dividend-paying, whole life insurance policies, individual investors can create their own network of "banks," which allows them to recapture the principal and interest they would otherwise pay to traditional banking institutions throughout their financial lives. Remarkably, the "borrowed" money is returned, reinvested, and recycled by the individual, with each of these "self-banking" cycles generating increased wealth!
Using whole life insurance policies in such a strategy is well-tested, but very few financial planners know how to do it. Therefore, here are some crucial things to remember as you seek advice:
Locate a specially-trained financial planner to carefully design and implement your unique "Cash Value Whole Life Insurance Policy." Otherwise, the policy could be considered a "Modified Endowment Contract" by the IRS, and many of the listed benefits could be lost.
Make sure your financial planner uses a specialized "Dividend-Paying Whole Life Insurance Policy" from a select "Dividend-Paying Whole Life Insurance Company." Many insurance agents are unaware of these programs and may try to steer you into various alternatives that just won't work.
Don't forget to create a "Substantially Over-Funded Policy" through the use of a flexible "Paid-Up Addition Rider." This results in an optimally-designed whole life insurance policy that provides minimum death benefits in exchange for maximum cash accumulation.
Ensure that your financial planner works with a "Non-Direct Recognition Life Insurance Company," which will allow you to borrow against your policy, while still accruing your maximum dividends. Thus, remember to avoid any "Direct-Recognition Life Insurance Company," which will penalize dividend accruals when there's an outstanding loan against your policy.
Focus on the long-haul. This is not a get rich quick scheme - this program requires long-term discipline and specialized advice. However, if your personal financial plan is properly-capitalized with properly-structured life insurance policies issued by properly-analyzed life insurance companies, you'll be highly rewarded for your commitment!
Personal Equity Institute specializes in all five of these areas. We know how to usewhole life insurance policies to generate true wealth for you and your family.