If you are a “baby boomer” nearing the age of retirement and you bought whole life insurance when you were in your twenties, you are really happy with the decision you made when you were younger. If you are a millennial just starting out, your chance to buy whole life is right now.
The key to understanding long-term value is to realize that you invest in something before you really have a need for it so that as you get older it is ready to help you.
Do I have to die for life insurance to be worth something?
Facing the possibility of one’s death is not pleasant for anyone. Life insurance gets a bad rap because of this. However, the death benefits for life insurance are supposed to help the ones you love who are left behind and that gives you some comfort. Nevertheless, there are many more self-interested reasons to get life insurance.
Beat the Odds – While You Build Cash Value
Imagine you get whole life insurance and you pay the same amount monthly for decades. It is not such a big amount if you start when you are young. The younger you are when you start, the lower the monthly premiums can be.
What happens with whole life insurance is that it builds up value over time. This is called “cash value.” Also, each year life insurance pays a dividend that can be re-invested in the life insurance, thereby increasing the cash value or the dividends can be taken out when paid.
As the cash value increases, you can borrow against it. Usually, these loans are at very low-interest rates, which is really helpful while you are still alive.
After many decades, a person may reach the age when their whole life insurance is “paid up,” which means there are no further premium payments necessary to pay to receive the death benefit.
This is what we mean by beating the odds. That lucky person can either leave the death benefit in place for any heirs to inherit or in some cases can cash out the policy and receive a lump sum payment.
What happens when you beat the odds, depends on the type of life insurance you have, so talk this over with your agent at Allegiance Insurance Agency, serving Richardson, TX and the nearby area.
Call to speak with your agent at Allegiance Insurance Agency in Richardson, TX to get a quote for life insurance or use the super-easy online form to request a quote.