Tags: whole life insurance | term life insurance | taxes

Whole Life Insurance Often Best Choice for Long-Term Planners

Whole Life Insurance Often Best Choice for Long-Term Planners
(Pichai Pipatkuldilok/Dreamstime)

By and Alexandra Bernstein
Monday, 23 October 2017 04:38 PM Current | Bio | Archive

There are very few “sure things” in life other than death and taxes. But there is a third one that ties back to the first two — life insurance. When it comes to a versatile financial asset that can provide a guaranteed amount of cash for a family to help them pay a tax and/or manage a lifestyle, life insurance is one of the best options available. It is an essential tool in your estate planning toolbox. Knowing what products are available to use and how to fund it can make a significant difference in protecting your children’s inheritance without wreaking havoc on your lifestyle.

In times of economic uncertainty, most people are thinking about what their financial goals are right now, as opposed to what their long-term financial needs and objectives might be. But thinking only of immediate financial objectives often is detrimental to your long-term fiscal well-being.

Take life insurance for example. A person thinking only of right now might purchase a term life insurance policy — one that could expire before their expected death, but protects their family from unexpected death. A person looking at the big picture, though, would be more likely to purchase whole life insurance. This is because it will provide a guaranteed benefit to his or her family at the time of death (no matter when that may be), and because whole life insurance can help them address other financial concerns like retirement or leaving their family with a lasting legacy. Additionally, it is not advisable to plan on what political party is in office, but rather for your long term needs.

Whole life insurance offers numerous benefits that don’t come with other life insurance policies. Along with the guaranteed-level death benefit, whole life insurance guarantees its premium and accumulates cash value over time that can be accessed at any time via policy loans and partial surrenders. With whole life insurance, there is also an extremely valuable option to add a long-term care rider to your policy. Additionally, whole life insurance is creditor proof, as long as you’re not involved in a lawsuit at the time of purchase in the state of Florida. Meanwhile, whole life insurance purchased through a mutual company also offers the opportunity for policy dividends to increase cash value and the death benefit.

While dividends are not guaranteed, they may be the closest thing the financial world has to offer. During our nation’s most difficult economic times, mutual companies (which operate not with an eye toward stockholders’ immediate needs, but toward policyholders’ long-term needs) have consistently continued paying dividends to their policyholders. So while many people who invested on Wall Street eight years ago possibly walked away with little or nothing to show for their investment, others investing that same amount in a mutual life insurance policy collected dividends every year since. Those dividends can be used to pay forward toward the next year’s premium; they can be used to purchase additions to your life insurance policy, or they can simply be collected as cash.

These benefits are why whole life insurance is more than simply a way to protect your family’s financial future in the event of your death; whole life insurance is a personal asset that can be one of the cornerstones of your long-term financial success and stability.

Richard S. Bernstein, CEO of Richard S. Bernstein & Associates, Inc., West Palm Beach, is an insurance advisor for high net worth business leaders, families, businesses, municipalities, and charitable organizations. An insurance advisor to many of America’s wealthiest families, he is a writer, trusted local and national media resource and expert speaker on estate planning and health insurance. Visit his website at www.rbernstein.com. To read more of his reports — Click Here Now.

Alexandra (Ali) Bernstein is a licensed Agent of New York Life Insurance Company, which offers a variety of products that can help meet a number of insurance and financial needs, including, but not limited to college funding, retirement, managing costs for extended periods of care and lifetime income strategies.

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There are very few “sure things” in life other than death and taxes. But there is a third one that ties back to the first two — life insurance.
whole life insurance, term life insurance, taxes
Monday, 23 October 2017 04:38 PM
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