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PERMANENT LIFE INSURANCE LIVING BENEFITS

Hello and welcome back.? David Galarza here and today we’re going to talk a little bit more about life insurance, more specifically permanent life insurance and it’s living benefits. Yes, permanent life insurance does have living benefits. It is not only used as a tool for you know there’s things that you can do in order to utilize this policy to your advantage while you’re still around and you can enjoy that with your family as a matter of fact. So there are different reasons why an individual would take a permanent policy as opposed to a temporary policy.

POLICY HERE, POLICY THERE, EVERYWHERE A POLICY

Permanent policies have more value to themselves in the fact that there is a cash account that’s being built or whether it’s separate as in a universal product or built in with a whole life product. There is still money that’s being built inside that policy. So as it grows, you’re able to utilize that you know there are things that you can do in order to utilize this policy to your advantage while you’re still around and you can enjoy that with your family as a matter of fact. So there are different reasons why an individual would take a permanent policy as opposed to a temporary policy. Permanent policies have more value to themselves in the fact that there is a cash account that’s being built or whether it’s separate as in a universal product or built in with a whole life product.

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BUILDING THE MONEY

There is still money that’s being built inside that policy. So as it grows, you’re able to utilize that In some cases, if an end of a life insurance plan is designed properly, by the time you retire, you can do one of two things. One, you can set it up. Joy, you’re no longer paying your premium and your life policy has essentially paid for itself and will continue to carry on until the inevitable, which is that the other aspect is using it for retirement, so you retire at age 60, the advisor-sold you a life policy that at the age of 65, you would be able to withdraw $15,000 a year until the age of 80. This would go on and believe it or not, depending on how the policy was set up, it would not deplete the value of the cash account in the policy and you would, in fact, have a remainder left as you continue to live. It all depends on how the policies are designed, but there are very useful ways to use life insurance. It is also a great vehicle for tax purposes.

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A LIFE INSURANCE RETIREMENT PLAN

A lot of high net worth individuals will take out or a single pay life policy and by themselves insurance, let’s just say $500,000, buys them “x” amount of life insurance. They make the lump sum payment immediately. Their policy has a cash value that they’re able to utilize while they’re alive. If anything is to happen to them in the event and there’s money that was owed and withdrawn from the policy, then the beneficiary would actually receive the death benefit minus the value that was withdrawn or alone. This makes it very great for the other individual or the beneficiary for the simple fact that the death benefit paid to them is absolutely tax-free, so it’s a great tax shelter. It’s illegal tout shelter and a lot of individuals will refer to this as a LIR, which is a life insurance retirement plan. Thank you and I hope to see you next time. I appreciate the time. I’ll see you again.

Don’t forget to check out our other blogs, especially the one about “is it covered?”