Whole Life Insurance (DOC) by GilroyDispatch


									What is Whole Life Insurance ?

First, let’s say what it is not. It is not a temporary policy. Whole Life is not for
someone who staunchly believes that life insurance is just a stop-gap or
commodity put in place for a period (term) while one endeavors to build
wealth. It is for someone who believes or comes to believe that it can be a
valuable piece of a financial portfolio.

Why can it be valuable ? It has value because it is a permanent policy that can
be designed in a multitude of ways to deliver multiple benefits. For example
your premium will never change, except to go down or cease entirely, if so
constructed. Conversely, your death benefit and living benefit will increase.
Before you ask, your living benefit is your cash value, which grows on both a
guaranteed, and non guaranteed basis. The source of the cash growth, in the
case of mutual insurers, are dividends earned by the policies themselves.

There is also a provision, available at a modest cost, that allows for payment of
your premium, if you were to become disabled due to injury or illness. The
premium would be paid, if necessary, at least, through age 60. In all fairness, a
disability waiver of premium is offered on some term policies as well. The fact
of the matter is that the waiver is noticeably more valuable on a permanent
policy that grows cash and death benefit.

A permanent policy is just that, a policy that you own, cash value which grows
tax deferred and once accumulated, cannot be lost, and death benefit for your
whole (entire) life time. There are tax efficiencies inherent in permanent whole
life policies.

Whole life or term- either or both, depending on your profile and inclinations
can be valuable components in helping to build financial well being. We’ll take
a little closer look next month.

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