Life insurance, at least to me, is like any other insurance; I like having the peace-of-mind in knowing that my family is covered in case the unthinkable happens. Here are a few reasons why I carry a whole life policy.
I currently have a $250k whole life insurance policy (I shall refrain from mentioning what provider that I use because my goal is not to advertise but to inform). While I realize that life insurance is not the solution for everyone, for me it’s a viable, affordable option that gives me, ultimately, peace-of-mind in knowing that my family is covered should I happen to leave this planet a bit earlier than I had expected.
Sure, it will take a while for my life insurance to really accumulate any borrowing power – and that’s not really the reason why I took it out in the first place – but it’s nice to know that in the future I can borrow some cash if I need to. My policy allows me to borrow for just about any reason, using a loan that I repay back under more lucrative terms than a standard bank loan. If the need should arise, it’s comforting to know that I have a savings mechanism built right in.
Protection of my Assets
The very purpose of my life insurance policy is to protect my assets and my family in case I pass away. I know that many estate taxes can be avoided and that the death benefits can secure the quality of life that my family has become accustomed to, ultimately assuring me that I don’t have to worry about what might happen should I become not long for this earth.
Accumulation of Funds
The more that I pay into my life insurance policy, the more that the funds accumulate. I am pretty confident that the insurance company I am utilizing won’t be going out of business any time soon, so I am also confident that the cash that accumulates will be in a safe place for whenever I need it (alive or dead).
Easier to Tap
Unlike my wife’s 401(k), my life insurance is easier to tap should the money kettle run dry or an unforeseen expense arise. I won’t have to worry about penalties or minimum distributions, or any of the other precarious red tape that’s aligned with popular savings plans like a 401(k) – which my wife and I also have, by the way.
Numerous Future Options
Once I have paid in enough to this policy, I know that accessing these funds comes with an array of options. For instance, I can convert it into an annuity and use some of the cash while also keeping a portion of the death benefits intact. Or, I can just keep paying into it and let it pay out after I have passed away as a way of me leaving a legacy and an inheritance behind for my family.
Can’t Change as I Age
Perhaps the most comforting notion of my policy is that it’s locked in. It can’t change or go away the older I get or if my health suddenly depletes. Because I locked it in at a younger age, it also locked in the insurability. Indeed, life is less stressful when you are insured.