At some point, you are bound to realize that you have more than enough money to last for the rest of your life. As you watch your children and grandchildren make their way in the world, you are sure to be wondering how you can leave them something of value when you pass on.
Unfortunately, no matter how much value your real estate and stock investments may have now, it will be almost worthless when you pass on. Aside from extremely heavy estate taxes, your heirs will have to fight off everyone not included in the will— plus all those people that claim you owed them money. That said, if you get a Universal or Whole life insurance policy, you and your heirs can avoid all of these problems.
Can Life Insurance Be Used Like an Asset?
Unlike regular life insurance, you can sell Universal and Whole life insurance policies on the secondary life insurance market. Typically, they can bring in 2 -3 times the face value of the policy.
If you want to use your life insurance as collateral for starting a business or buying property, you can also do that. In addition, if you need to take money out to take care of medical expenses or some other need, there will be far fewer penalties than you would get from IRA or other annuity withdrawals.
What Is Tax Free Growth?
When you buy a life insurance policy, it is not taxed, even though the value steadily increases over the years. This is very important to consider if you have been spending a fortune on taxes from managed mutual funds or other stock investments.
Rather than spending all that money on taxes, you might just as well put your money into Universal or Whole life insurance policies that will earn you plenty of interest. Even better, when you pass on, your heirs will not have to pay interest on the money they receive from the life insurance because that money is not considered income.
The Perfect Instrument for Your Heirs
Consider a situation where you suspect your heirs are going to have problems getting what you leave behind because others will contest the will. In all of these cases, it will cost your heirs all kinds of money to settle the estate before they can do anything useful with what is left over.
On the other hand, when you buy a life insurance policy and designate a beneficiary, no one can contest it. As long as the beneficiary knows they need to file a claim for the money, no one else will ever need to know about the inheritance.
There is no question that spending your lifetime acquiring wealth can be an exciting process. If you want to protect your assets and your intended heirs, it makes sense to buy Whole or Universal life insurance. While you may not be thrilled at the idea of dying, at least this type of policy will be one of the best investments you can make for your own future and that of your heirs.