Wealth Guardians: Uncovering the Benefits of Whole Life Insurance (Part Two - Guaranteed Death Benefit)
Dwight Heck
| Best-Selling Author | Podcaster | Lifestyle & Finance Coach | Entrepreneur | Speaker
The second piece in our series on the benefits of buying whole life insurance for business owners is where we'll delve deeper into two important aspects of whole life insurance in this article: the guaranteed death benefit and cash value growth.
Guaranteed Death Benefit: Permanent Security
Your beneficiaries will receive the guaranteed death benefit amount tax-free after your demise. Your loved ones will have financial security and peace of mind knowing they will be taken care of when you pass away.
Consider buying a whole life insurance policy with a $500,000 guaranteed death payout. Your beneficiaries will receive $500,000 tax-free upon your passing as long as you’ve been paying your premiums. This death benefit may be used to pay for final costs, make up for lost income, or further financial objectives.
Developing Cash Value Throughout Time: Long-Term Growth
Your entire life insurance policy's investment portion is known as the cash value. Your premium payments are used in part to increase this cash worth, which grows tax-deferred.
Example: The cash value of your insurance coverage could increase significantly over time. Let's imagine that after 20 years, the cash value of your insurance coverage has grown to $100,000. This cash value can be used to cover future premiums, access funds through a policy loan, or even supplement your retirement income.
It's vital to remember that cash value withdrawals or borrowings may lower the death benefit and have an adverse effect on the policy's performance as a whole.
Whole life insurance's guaranteed death benefit and cash value growth are two strong qualities that can offer lifetime protection and long-term growth for business owners looking to ensure their financial future.
A discussion of the advantages of policy loans and the possibility of dividends in whole life insurance policies will be covered in the next article in this series, so stay tuned.
For a limited time, you can get a free copy of my book, "Give a Heck," at https://dwightheck.com/giveaheckbook, where you'll find more insights on financial education and living a life on purpose.