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Friday, August 05, 2011

Financial Friday: Both Permanent Life Insurance and Invested Assets are the Pillars of Financial Stability and Wealth Building

It is pivotal to most people to have integrated a solid relationship between retirement assets and permanent life insurance assets in both preretirement and retirement. These two pillars working together are unbeatable in maximizing the use of your money today and well into your retirement.  This is especially true for non-traditional families who may not have access to other streams of revenue via a partner’s social security or pension benefits.

What do we all want out of our retirement?

The answer: The ability to take the highest income streams possible and perpetuate them throughout our retirement under all economic circumstances.

There are four types of permanent life insurance

Variable Life: As with whole life, you pay a level premium for life. However, the death benefit and cash value fluctuate depending on the performance of investments in what are known as subaccounts. A subaccount is a pool of investor funds professionally managed to pursue a stated investment objective. You select the subaccounts in which the cash value should be invested.

Universal Life: You may pay premiums at any time, in any amount (subject to certain limits), as long as the policy expenses and the cost of insurance coverage are met. The amount of insurance coverage can be changed, and the cash value will grow at a declared interest rate, which may vary over time.

Variable Universal Life: A combination of universal and variable life. You may pay premiums at any time, in any amount (subject to limits).

Whole Life: You generally make level (equal) premium payments for life. The death benefit and cash value are predetermined and guaranteed (subject to the claims-paying ability of the issuing insurance company). Your only action after purchase of the policy is to pay the fixed premium.

Out of the four types of permanent life insurance, there is only one can ensure income on a guaranteed basis, that’s Whole Life.

To find out more how permanent whole life insurance fits into your wealth building call Jay Dworsky, Dworsky Agency, 612-327-1599. Or email: jaydworskyagency@gmail.com

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Creative Commons License photo credit: WisDoc


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