Wednesday, 25 July 2012

Whole Life Insurance is a Good Investment Product for Savers


With so many different types of insurance out there, it can often be difficult to determine which policy best suits your needs.  Depending on your current financial situation, as well as your future financial goals, different plans meet different needs. If you are starting out with a young family, term life insurance may suit your financial situation and goals.  If you are in a stable financial position and you are interested in combining life insurance and investments, then you need to know that whole life insurance is a good investment product for savers! 

What is whole life insurance? Whole life insurance is an insurance policy that protects you for your entire life. Unlike term life insurance, which covers for a specific range of time, 10 or 20 years for example, a whole life insurance policy covers you for life. This means that you are protected for your entire life, without having to worry about renegotiating after your term life insurance policy has expired. 

Even better, whole life insurance is not just important as a life insurance plan – it is also a great way to invest and save money for your future!  Whole life insurance is a good investment product for savers because it carries a cash value, is a safe investment vehicle, and because it carries important tax benefits! 

Carries a Value and Can Be Borrowed Against: A whole life insurance policy carries a cash value, and you can use this cash to borrow against. The cash value of your insurance policy can be taken out and used as a loan for other expenses. Also convenient is the fact that you can pay it back in a number of different ways, for example, making regular payments or letting the interest accumulate and having the amount owing subtracted from the benefit paid out in the end, whichever option works for you. 

Safe Investment: As an investment, a whole life insurance policy is also an effective vehicle by which to accumulate wealth and generate value for your future financial needs. Whole life insurance policies are designed to be low maintenance. The accumulated cash value is invested in a diversified investment pool which is managed by professionals, meaning little to no involvement is required by you. Safe and secure, whole life insurance policies are designed to meet your investment AND insurance needs. 

Tax Deduction: If you choose not to withdraw the cash that accumulates, the value of the investment will grow tax free. If you wait and only draw the cash once you retire, you will most likely be in a lower tax bracket than before you retired, and thus will have the chance to keep more of your money!  

These three major reasons why whole life insurance is a good investment product for savers should help you to determine, firstly, what it is you want to gain from your insurance policy, and secondly, how your insurance policy can work for you.  

For more information about how whole life term insurance is a good investment product, or to discuss what insurance policy will suit your current needs, please contact Gary Mandel at Independent Financial Concepts Group at 416-849-1653 or visit www.wecoveryou.ca.

6 comments:

  1. My wife and I are expecting a child in the near future so getting life insurance is something I have strongly been considering. I know it is important to have because if anything were to happen to me its important for my wife to be taken care of. I've been looking at life insurance quotes but I was having a hard time deciding whether whole or term was for me. The information about borrowing against the policy and the tax information really helped me out!

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