Setting the Proper Path
First, it is important to understand the two main types of life insurance, term and permanent insurance (See FAQs).
Why Choose The Grier-Pierre Agency?
Growing Wealth
Since term life insurance doesn’t have a cash value component, permanent life insurance is the way to go if your goal is to build wealth through your policy. Below are some strategies for using such a policy to your advantage.
Invest Early
The younger you are, the larger the chunk of your premium that gets invested, growing your cash value quicker. As you age, more of this monthly payment goes toward the cost of insurance.
Use the cash value as supplemental retirement income.
If you have built up a significant amount of cash value and your beneficiaries are not reliant on the full amount of the death benefit, flexible cash withdrawals can be useful. Typically the withdrawals are tax-free up to the amount you’ve already paid in premiums.
Preparing For the Future
Reinvest any policy dividends you’re receiving into the cash value to earn more interest
Paying more than the minimum premium will increase the cash value of your policy. Over time, the dividends and interest can accrue into a sum that is more than the amount of premiums paid, essentially becoming equity.
Take out a loan against the cash value
As this comes with a lower interest rate than a bank loan, it can be a cost-saving way to renovate your home, start a business, or pay for college tuition.
Assist with estate planning
You can withdraw some of the cash value to cover funeral costs and pay off debts. You can also use the policy to transfer assets to your beneficiaries without having to pay taxes.
Allow your policy to mature and leave a legacy for loved ones
Depending on how your policy is structured, it may give you the ability to choose a maturity date. These policies are designed to endow when they hit that date, which means the cash value equals the death benefit. If you let this type of policy mature, you will receive the full cash value in place of the death benefit. This is a good option if you want to be covered for a certain amount of time to protect your loved ones but also get the cash value if you outlive your policy. You can then invest this lump sum in other ways, which will become part of your estate.
Using life insurance as a tool for growing wealth is complicated and should be a thoroughly considered decision. Reach out to a member of the Grier-Pierre Agency to help you determine what type of policy and investment strategy is right for you and your family.
Why Choose Us
We Offer Personalized Service
Protect the people who depend on you financially. Tailor the premium and death benefit amounts to your changing family circumstances.
Competitive Pricing
We work with multiple insurance carriers to ensure that our clients receive the best coverage at the best price they qualify for. Our team will shop around and compare rates to find you the most competitive pricing and many times no physical, just answer a few medical questions.
Contact Us
Our Mission is to Get You Approved!
Schedule a Free Assessment with us. Let us help you with any questions you may have about finding the coverage that's a right fit for you and your family!
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