It's an Emergency fund, an Opportunity fund,
a Retirement fund, and it's your Legacy.

A Better Way To Save.

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Benefits

1. Guaranteed Compound Interest

2. Tax-free and Deferred Growth

3. Money is Liquid and Accessible

4. Protected by Death Benefit

5. Protection from Litigation

6. Currency Standard Protection

7. Gives Every $ Several Jobs

8. Generational Wealth

9. Living Benefits

Common Uses

1. Emergency Fund

2. Opportunity Fund

3. Debt Consolidation

4. College Savings Fund

5. Business Funding

6. Home Improvement

7. Travel or Vacation

8. Wedding or Special Events

9. Supplemental Retirement Income

Schedule A Savings Illustration

Living Benefits

These policies can include Living Benefits, which is an advance from the death benefit in the event of a critical or terminal illness, or under certain medical conditions.

Cash Value

Inside of a properly designed and optimized dividend paying, high cash value, whole life insurance policy is a cash "vault" sometimes called Paid Up Additions. There are guaranteed growth rates and inside of the policy the growth is tax-free.

Death Benefit

The death benefit of any life insurance policy is tax-free to the beneficiaries. In this case, the death benefit is also used as collateral against any outstanding policy loans.

Policy Loans

The cash value in the policy is accessible as soon as it clears in the account, typically within 20 to 30 days of deposit. The insurance carriers allow policy loans up to 90% of the cash value. Because the funds are borrowed against the cash value and not from it, your money never leaves the policy, which means it is not taxable and the growth of the cash value is uninterrupted in with certain insurance carriers. Policy loans do have interest, but if managed properly and with certain strategies, the interest can be minimal and will not impact your policy performance.

Whole Life Insurance Key Features

Schedule A Savings Illustration

Business Use

Whole life insurance can serve various purposes for businesses, providing financial protection, investment opportunities, and tax advantages.

Here are some common ways businesses use whole life insurance:

Key Person Insurance:
Businesses can purchase whole life insurance policies on key employees, executives, or owners to protect against the financial loss that would occur if the key person were to die prematurely. The death benefit can help cover expenses, replace lost revenue, or facilitate the transition of leadership.
Buy-Sell Agreement Funding:
Whole life insurance can fund buy-sell agreements between business owners, ensuring a smooth transition of ownership in the event of a partner's death or disability. The policy's death benefit can be used to buy out the deceased partner's share of the business from their heirs or beneficiaries.
Business Succession Planning:
Whole life insurance can play a crucial role in business succession planning, providing liquidity to fund the transfer of ownership from one generation to the next. The policy's cash value can be used to equalize inheritances among heirs or to provide income for surviving family members.
Executive Benefits:
Whole life insurance can be used to provide executive benefits, such as supplemental retirement income, deferred compensation, or employee retention incentives. Cash value life insurance policies offer tax-deferred growth and can be structured to provide tax-free loans or withdrawals for key executives.
Asset Protection:
The cash value component of whole life insurance policies offers a level of asset protection against creditors and legal judgments. In many states, cash value life insurance policies enjoy favorable treatment in bankruptcy proceedings and are exempt from seizure by creditors.
Employee Benefits:
Employers can offer whole life insurance as an employee benefit, providing valuable life insurance coverage and a savings vehicle for employees. Cash value life insurance policies offer employees the opportunity to build tax-deferred savings and access funds for emergencies or retirement.
Estate Tax Planning:
Whole life insurance can be used as part of an estate tax planning strategy to provide liquidity to pay estate taxes and preserve family wealth. The death benefit is generally received income tax-free by the beneficiary and can help cover estate settlement costs without the need to sell other assets.
Collateral for Loans:
The cash value of a whole life insurance policy can be used as collateral for business loans or lines of credit, providing additional liquidity and flexibility for financing business operations, expansions, or acquisitions.

Overall, whole life insurance offers businesses a versatile financial tool that can provide protection, investment growth, and tax advantages. By incorporating whole life insurance into your businesses financial planning strategies, you can mitigate risks, enhance financial security, and create opportunities for long-term success and growth.

Retirement Income

Whole life insurance can serve as a source of retirement income through its cash value accumulation and withdrawal options.

Here's how whole life insurance can be used to generate retirement income:

Cash Value Accumulation:
Whole life insurance policies accumulate cash value over time, which grows tax-deferred and can be accessed during retirement. The cash value typically earns a guaranteed minimum interest rate set by the insurance company, providing stable growth over the policy's lifetime.
Policy Loans:
Policyholders can borrow against the cash value of their whole life insurance policy through policy loans. These loans are typically available at a fixed interest rate and do not require a credit check or loan approval process. Policy loans can provide retirees with tax-free access to funds to supplement their retirement income.
Partial Surrenders:
Retirees can also make partial withdrawals or surrenders from the cash value of their whole life insurance policy to generate retirement income. These withdrawals are generally tax-free up to the amount of premiums paid into the policy and may be subject to taxes on any gains above that amount.
Lifetime Income Options:
Some whole life insurance policies offer optional riders or features that provide guaranteed lifetime income. These riders, known as annuity or income riders, allow policyholders to convert a portion of their cash value into a stream of income payments that last for life, providing financial security in retirement.
Tax Advantages:
Withdrawals and loans from the cash value of a whole life insurance policy are generally tax-free up to the amount of premiums paid into the policy, as long as the policy remains in force. This tax treatment can provide retirees with tax-efficient income in retirement and help minimize their tax liability.
Legacy Planning:
Whole life insurance can also serve as a component of retirement and legacy planning, providing a tax-free death benefit to beneficiaries upon the policyholder's death. This death benefit can be used to replace lost income, pay off debts, or provide a financial legacy to loved ones.
Protection Against Market Volatility:
Unlike other retirement savings vehicles, such as 401(k)s or IRAs, whole life insurance offers protection against market volatility. The cash value of the policy is not subject to market fluctuations and remains stable and predictable over time, providing retirees with peace of mind and financial security.

By incorporating whole life insurance into your retirement income strategy, you can benefit from guaranteed growth, tax advantages, and financial flexibility while ensuring a reliable source of income to support your desired lifestyle in retirement.

Estate Planning

Whole life insurance can be a valuable component of estate planning, offering several benefits to individuals seeking to protect and transfer their wealth efficiently.

Here's how whole life insurance can be used in estate planning:

Liquidity for Estate Taxes:
The death benefit from a whole life insurance policy can provide liquidity to cover estate taxes and other settlement expenses, ensuring that heirs do not have to sell assets or deplete cash reserves to meet tax obligations. This can help preserve the value of the estate and prevent the forced sale of assets at potentially unfavorable terms.
Wealth Transfer:
Whole life insurance allows individuals to transfer wealth to their heirs in a tax-efficient manner. The death benefit passes directly to the designated beneficiaries outside of probate and is generally not subject to income tax. This can expedite the distribution of assets to heirs and minimize administrative costs associated with estate settlement.
Equalization of Inheritances:
Whole life insurance can be used to equalize inheritances among heirs, particularly in situations where certain assets, such as a family business or real estate, are difficult to divide equitably. By naming beneficiaries to receive the death benefit proceeds, individuals can ensure that each heir receives an equal share of the estate's value.
Protection of Family Businesses:
Whole life insurance can provide funding for the transfer of ownership in family businesses, helping to preserve the continuity and viability of the business for future generations. The death benefit can be used to buy out the interests of deceased owners or to provide financial support for surviving family members involved in the business.
Charitable Giving:
Whole life insurance policies can be structured to include charitable beneficiaries, allowing individuals to support their favorite charitable causes while also providing for their loved ones. The death benefit can be directed to charitable organizations, providing a lasting legacy and potential tax benefits through estate tax deductions.
Estate Equalization:
Individuals with significant illiquid assets, such as real estate or closely held businesses, can use whole life insurance to equalize their estates among beneficiaries. By naming one or more beneficiaries to receive the death benefit proceeds, individuals can ensure that each heir receives a fair share of the estate's overall value, regardless of the nature or value of the assets they inherit.
Legacy Planning:
Whole life insurance can help individuals create a lasting legacy for future generations by providing financial support for heirs, funding educational expenses, or endowing charitable foundations or trusts. The death benefit can be structured to support specific goals or objectives outlined in the individual's estate plan, ensuring that their wishes are carried out after their passing.

In summary, whole life insurance can play a valuable role in estate planning by providing liquidity, facilitating wealth transfer, equalizing inheritances, protecting family businesses, supporting charitable giving, and creating a lasting legacy for future generations. By incorporating whole life insurance into your estate plans, you can achieve your financial goals, protect your assets, and provide for your loved ones in a tax-efficient manner.

What About
Term Life Insurance?

Convertible term life insurance allows policyholders to convert their term life insurance policy into a whole life insurance policy without undergoing a medical exam or providing evidence of insurability.

Here's how convertible term life insurance works with whole life insurance:

Term Life Insurance:
Term life insurance provides coverage for a specific period, such as 10, 20, or 30 years, with a fixed premium for the duration of the term. If the policyholder dies during the term, the death benefit is paid out to the beneficiaries. However, if the policyholder outlives the term, the coverage expires, and no benefits are paid out.
Conversion Option:
Many term life insurance policies include a conversion option that allows policyholders to convert their term policy into a whole life insurance policy within a specified conversion period, typically before the end of the term or a certain age (e.g., age 65 or 70). The conversion option provides flexibility and the opportunity to obtain permanent coverage without the need for additional underwriting.

Overall, convertible term life insurance provides flexibility and the opportunity to obtain permanent coverage through whole life insurance, allowing policyholders to protect your loved ones and build wealth over time.

Source: https://advisor.visualcapitalist.com/hierarchy-of-financial-needs

Questions?

If you're interested in learning more, but you're not ready yet to see an illustration or if you want to talk through your numbers first, please schedule a free 15 minute clarity call.

Sebastien Boyer
The Approved Guy

Licensed Life Insurance Agent

Serving Nationwide USA

seb@theapprovedguy.com

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When Is Final Expense
The Right Solution?

Final expense insurance, also known as burial insurance or funeral insurance, is a type of life insurance policy designed to cover the costs associated with end-of-life expenses, such as funeral and burial expenses, medical bills, and other outstanding debts.

Here are some key points about final expense insurance:

Purpose:
The primary purpose of final expense insurance is to provide financial protection for surviving loved ones to cover the costs associated with a policyholder's death. This can include funeral and burial expenses, which can be significant and unexpected for many families.
Coverage Amount:
Final expense insurance policies typically provide coverage amounts ranging from a few thousand dollars to $25,000 or more, depending on the insurer and policy options selected. The coverage amount is intended to cover funeral costs, final medical bills, and other end-of-life expenses.
Simplified Underwriting:
Final expense insurance often features simplified underwriting, which means that applicants may not be required to undergo a medical exam or provide extensive medical history. Instead, applicants may only need to answer a few health-related questions to qualify for coverage.
Guaranteed Acceptance Options:
Some final expense insurance policies offer guaranteed acceptance options, which means that applicants are guaranteed to be approved for coverage regardless of their health status. This can be beneficial for individuals with pre-existing health conditions or those who may have difficulty obtaining traditional life insurance.
Premiums:
Premiums for final expense insurance policies are typically affordable and fixed for the duration of the policy. Premiums can be paid monthly, quarterly, semi-annually, or annually, depending on the insurer and policy terms.
Cash Value Accumulation:
Some final expense insurance policies may accumulate cash value over time, which can be accessed by the policyholder through policy loans or withdrawals. This can provide an additional source of funds for unexpected expenses or supplemental income in retirement.
Death Benefit Payout:
When the insured passes away, the death benefit from the final expense insurance policy is paid out to the designated beneficiary. The beneficiary can use the funds to cover funeral and burial expenses, medical bills, outstanding debts, or other financial obligations.
Ease of Access:
Final expense insurance policies are often easy to apply for and can be purchased directly from insurance companies, agents, or online platforms. This accessibility makes it convenient for individuals to obtain coverage and protect their loved ones from financial hardship after their passing.

Overall, final expense insurance provides peace of mind and financial security for individuals and families facing end-of-life expenses. By covering funeral and burial costs and other final expenses, final expense insurance can help alleviate the financial burden on surviving loved ones during a difficult time.