In this article, we will discuss life insurance’s power and how it can be used to build real wealth, allowing individuals to take control of their financial futures and become their banks.
When most people think about life insurance, they tend to primarily focus on the death benefit – the amount their beneficiaries will receive if they pass away while the policy is active. However, another critical component of life insurance often needs to be noticed – borrowing from the policy’s cash value. This means that you are borrowing from yourself, not a bank.
While life insurance may seem like just another expense at first glance, the fact is that it can be a powerful tool for building wealth over time. Just as you view investing in an IRA or 401K as an investment for your future retirement, you should consider life insurance similarly. An IRA or a 401K is a low investment to a life insurance policy. When you invest in an IRA or 401K, you are placing your money in shackles – you are tying it up until you’re about 59 years old. Your money becomes worthless to you right now. A pet rock serves you better.
On the other hand, with a life insurance policy, you can allow the interest of the approach to accrue and compound, just like in an IRA or 401K. But with a life insurance policy, the claim is guaranteed, unlike an IRA or 401K. Additionally, you can take out a loan against a life insurance policy to purchase an asset that gives you more cash flow, such as a real estate purchase or buying a business. Try doing that with your IRA or 401K. With an IRA or 401K, you will be hit with a penalty for withdrawing the money, but not with life insurance. This is how you can become your bank – the bank of you. Instead of giving your money to someone else, like an IRA or 401K, you’re just giving the money to yourself. You can use your policy to finance large purchases such as investment property or educational expenses without dipping into your savings or other investments.
Whole life or permanent life insurance policies come with what is known as the five significant guaranteed returns: dividend accumulation, tax-free growth, policy loans, and death benefit. These guaranteed returns provide a stable source of income and give investors a greater sense of security and peace of mind. In addition, many companies offer policyholders cash bonuses and interest-free loans at milestone points, like when they’ve been a policyholder for a certain period or paid a certain amount in premiums. These additional perks can provide value beyond just the cost of the policy itself.
In summary, although life insurance may initially seem like just another expense, it is a precious asset supporting both short-term and long-term wealth-building goals. Remember to underestimate its power. By using the cash value of a life insurance policy to borrow from yourself and taking advantage of the significant five guaranteed returns, you can become your bank and take control of your financial future.
Ready to take control of your financial future and become your bank? Request a life insurance quote from our agents today and learn how to unlock life insurance’s power to build real wealth.