Did you know that in 2020, 54% of all people in the United States were covered by some kind of life insurance policy? That’s a majority of people who believe in the efficacy and usefulness of getting life insurance coverage to protect themselves and their dependents in the future.
Are you wondering which of the various life insurance policies to choose for yourself? In this article, we share with you 3 benefits of permanent life insurance that will get you running to your nearest life insurance agent.
Deferred Tax Benefits
This is the biggest advantage of investing your precious cash into a permanent life insurance policy. This life insurance policy, unlike others, actually has an investment component to it as well. You are investing your money into assets that are growing tax-deferred until you choose to withdraw it at a certain later date.
If you are already maxed out on your tax-deferred accounts like the 401(k)s or IRAs, then you could use a permanent life insurance policy to invest any additional cash and allow it to grow tax-free until you decide to withdraw it, at the age of 55 or 65 or whenever your policy dictates.
Another advantage of permanent life insurance has to be its lifetime coverage.
Too many life insurance policies will cover you for a certain limited period — something like 10 to 25 years, and then they expire. The problem is that all that money you put into the life insurance policy is gone now, once it expires.
With a permanent term life insurance policy, you are covered for life. This is advantageous if you’re expecting to live well into your 80s or later.
Borrow Against Your Coverage
The negative aspect of a lot of life insurance policies is that you pour lots of cash into them, but they are just sitting there, unable to give you any benefit while you are alive. With a permanent life insurance policy, you can borrow against the cash value of the policy.
This is something you cannot do when investing in a tax-deferred account like a 401(k) or IRA. You would be charged a penalty for taking money out of this account before you reach retirement age.
The money you borrow from your permanent life insurance coverage can be used to make renovations to your home or to purchase an investment property. You could even use it to pay for your children’s college or something else useful.
To learn more about this, check out Paradigm Life.
Reap the Benefits of Permanent Life Insurance
Now that you know what the various benefits of permanent life insurance are, you are ready to take advantage of them for your own financial welfare and that of your dependents. There are very few investment instruments like this on the market.
Check out more articles on our website on personal finance tools so you can build a strong financial future for yourself.