For four in 10 Americans, household finances are the cause of substantial stress, and one in five admit it’s a source of daily worry. This is understandable since 60 percent of households say they would have to borrow money to pay a $500 car repair bill and 40 percent of Americans admit they have no retirement savings.
If you are in this situation, a financial service advisor can show you how your life insurance policy is truly a life-saving benefit. It not only provides guaranteed death benefits at a difficult time, but a permanent life insurance policy that accumulates cash value can also provide living benefits by guaranteeing liquidity—use and control of these values in the event of an emergency, opportunity or retirement.
The key features of a whole life insurance policy are guaranteed premiums, guaranteed cash value, guaranteed death benefit, guaranteed non-forfeiture provisions, and a choice of dividend options. These benefits can provide you peace of mind and flexibility throughout your life.
Whole life insurance is flexible and has contractual provisions that guarantee its flexibility. While dividends are not guaranteed, once an insurance carrier declares and pays them, they are guaranteed. Some features and benefits about dividends are:
- Dividends increase cash value, so you have more money for an emergency, opportunity or as a supplement to retirement income.
- Dividends buy paid-up additions, which increase the death benefit. The increase can result in more funds being available for chronic and terminal illness (if an accelerated death benefit rider for chronic and terminal illness is available on the policy).
The benefits of these guaranteed cash values are that they can provide life-impacting benefits to as your needs change because they provide liquidity, use and control of your money and–in essence–your lives! You will have ready access to cash in the event of an emergency or opportunity, or for college planning, or to supplement retirement income.
When policy owners borrow against their whole life policy, they aren’t subject to a credit check, they usually get their money in a few days, and there’s no fixed repayment schedule. Loan repayment is highly recommended, though, to ensure cash values continue to grow at the guaranteed rate and are available again for future use. Participating whole life insurance offers all these guaranteed benefits and financial liquidity.
For many retirees, there is a growing uncertainty about their retirement and it is making them look closely at assets like life insurance policies as a way to pay for it.
The life insurance policies many seniors have paid into, often forgotten or misunderstood, have grown in importance as a potential income source that can make a difference once you retire. Retirees often hold these policies to pass on assets to heirs or to pay for estate taxes upon death, but, as needs change (and the estate tax exemption has been raised), the need for the policies can change too—especially when their costs rise.
Medical costs and the threat of the need for long term care have turned many seniors’ plans for retirement upside down, requiring them to find more assets than they originally thought they would need. They could also address the expensive costs of long term care by exchanging the policy for a Long-Term Care Benefit Account.