There are many reasons why family dynasties, banks, and big corporations have been using permanent life insurance for generations to grow and protect their wealth. Here are few key reasons why wealthy utilized properly design permanent life insurance for creating and preserving wealth :
1. Principal protection guarantees of your money. With permanent life insurance (if design right), your original investment is guaranteed to be returned to you, no matter what happens in the markets.
2. Guaranteed growth of your money every year. With most permanent life insurance policies, your money will grow by a guaranteed rate each year. This means you can count on a predictable return on your investment, even if the markets are volatile.
3. Dividends paid to policy owners are not taxable. When you invest in a permanent life insurance policy, the dividends that are paid to you are not subject to taxation. This can provide a significant boost to your overall returns.
4. Ability to borrow money from your policy at very low interest rates. If you need to borrow money for any reason, you can do so by taking a loan against your life insurance policy. The interest rates on these loans are typically much lower than rates you would get from a bank or other lender.
5. The death benefit is paid tax-free to your loved ones. When you die, the death benefit from your life insurance will be paid tax free to your love one.
6. It offers guaranteed life insurance protection and the opportunity to grow cash value on a tax-deferred basis. The cash value can be accessed at any time, for any reason, without taxes or penalties.
7. If utilized properly, permanent life insurance can be used to recapture lost depreciation on major purchases, to pay interest and fees to banks. It can also be used to plans and to provide estate planning benefits.
8. Estate taxes can take a huge chunk out of your estate if you are not prepared. For instance, If your estate is valued at over certain threshold or limit, you will be subject to a 40% estate tax. However, if you have a permanent life insurance policy, the death benefit can be used to pay estate taxes, meaning your beneficiaries will get to keep more of your estate.
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9. Provide high starting cash value amount. When you contribute to the policy, the cash value begins to grow immediately and continues to grow tax-deferred.
10. Permanent life insurance policies offer the opportunity to use the cash value to fund a retirement plan, which can provide significant tax advantages.
11. The tax-deferred savings, by using a permanent life insurance policy, you can save money on taxes throughout the life of the policy. This can add up to significant savings over time.
12. Policy’s cash value is protected from any creditors, lawsuits, or bankruptcy. No matter what happens, your cash value life insurance policy will be there for you and your family.
13. Cash value life insurance is that it is a “set it and forget it” investment. Once you have your policy in place, you don’t have to do anything else. Your cash value will grow over time, and you can access it whenever you need it.
Permanent life insurance is an excellent way to grow and protect wealth. It offers many benefits that other financial tools cannot match. If you are looking for a way to secure your financial future, permanent life insurance should be at the top of your list.
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We specialize in cash value whole life insurance products, which offer a range of benefits, including death benefits, retirement plan, cash value accumulation, and tax-advantaged savings.
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