Pros of Permanent Life Insurance

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Pros of Permanent Life Insurance

The primary pros of permanent life insurance are the death benefit and cash value growth.

Rather than expire upon a specified term, your death benefit will be there when you need it most: upon death. Further, in a properly designed permanent life insurance policy the death benefit can grow over your lifetime.

This is something to consider. Suppose you secured a $100,000 whole life policy today. But over time your policy’s death benefit will grow as your cash value grows. That way, the older you get, the more valuable your policy becomes. It is also a good hedge against inflation, as today’s dollar will be worth significantly less in the years to come.

Further, with an ever increasing death benefit fueled with paid up additions you have the freedom to spend down other assets, take out a reverse mortgage, etc. without fear of denying your kids an inheritance. Your death benefit can be used to pay off the reverse mortgage or replenish diminished cash accounts.

Limited Pay Life Insurance

And there are some types of permanent life insurance where you can stop making premium payments and still enjoy the advantages of permanent coverage, such as 10 pay whole life insurance. That way you have an ever increasing death benefit and cash value account that you no longer have to make premium payments on.

Withdrawals and Policy Loans

As your cash value grows you can either withdraw your cash value or take out a policy loan. Having cash value at your disposal is a great way to supplement your retirement income.

Life insurance loans are income tax free. And a life insurance policy loan is generally not considered when factoring your taxation on your social security benefits.

Infinite Banking

Another benefit of permanent life insurance is when you use it in conjunction with infinite banking. If you are not familiar with the infinite banking concept please click the link but the basic premise is that your cash value in your policy acts as your own private banking system. You can grow your cash value and then use it to pay off debt, purchase other income producing assets, finance your friends and family, and pretty much anything else under the sun.

And as you are practicing personal banking using your own cash value in your permanent life insurance policy, you are growing your cash value and death benefit as you pay back your loan, with interest. Once again, if you are not familiar with infinite banking, AKA cash flow banking, bank on yourself, or some of the other names it goes under, this concept is worth checking out.

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