Whole life insurance policies are one of the best-kept secrets of financial success. While they also serve as a vital first step in the infinite banking process, you can also choose to pursue this option for the additional benefits that you can gain. These policies are simple to set up and can assist you in reaping financial benefits for years to come. Below, we’re covering the five benefits that you can expect when you choose to open a whole life insurance policy.
Immortal death benefits
Whole life policies differ from other forms of traditional policies in a few key ways. One of the most notable includes the “immortal” death benefits that you and your account’s beneficiaries can enjoy. When your account is kept in current standing, and all premiums have been paid in full, you are guaranteed an “eternally lasting” death benefit. It won’t expire, no matter how much time occurs between the account’s creation and the account holder’s death.
Additional beneficiaries
With whole life policies, you can choose to add on an additional beneficiary. This is known as a “cash value rider,” who is able to take the cash value that would otherwise be redirected to the insuring agency. They will also be able to maintain the “face” value of the account, which will include the death benefit. This can help you to maximize the possible benefits that you can gain from the policy, and keep your loved ones as supported as possible in the event of your passing.
Cash value built over time
Unlike certain types of other policies, you can work to build cash value within your whole life policy’s framework over time. This can continue to grow, and will eventually be divided among your named “riders” or beneficiaries on the account. It’s a fantastic way to give back to your loved ones and manage your finances within your own purview. You may also stand to benefit from additional dividends, which we’ll expand on below.
Annual or recurring dividends
Depending on the insuring agency that you choose, you may be eligible for additional recurring dividends. These can provide you with an additional financial benefit and will vary entirely depending on the institution of choice. We recommend shopping around and evaluating your options in order to walk away with the best possible arrangement.
Automatic non-profit creation or charitable opportunities
With this type of account, you can also choose to leave your dividends and earnings to a cause that you feel passionate about. This can be anything that you’d like but should be done under the supervision of a tax professional to remain in compliance with changing tax laws. You may also have the opportunity to form a nonprofit to hold the funds in the event of your passing and have them be dispersed to an organization of your choice.
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