Life insurance is extremely useful. It can protect you and your family, and make sure that they’re cared for once you’re gone. But there’s one thing that I bet you did not know it can do. Life insurance can also help you build wealth.
Here’s how it works:
Life insurance can fund your retirement
Did you ever hear of annuities? They are insurance policies that accumulate until your retire. Afterwards, they pay retirement income until you die. Annuities can accumulate tax-deferred wealth through larger contributions than other retirement plans, including 401(k)s or IRAs. Although these other plans let you annuitize disbursements, few people use them. Because of this, they miss out on important opportunities to ensure lifelong retirement payments.
Life insurance can help finance your business
As a business owner, it’s definitely a good idea to get life insurance. And don’t just get it for you, get it for your key employees as well. This way, if something happens, both the insured and the business are protected. With permanent life policies, you can build up cash value and then withdraw it and invest it into your business. It’s better and easier than getting a loan.
Life insurance can help you pass on the family business
People who have all their wealth invested in their business can use their insurance to transfer ownership of the business. Once the owner dies, his or her family get the proceeds of the insurance policy in exchange for ownership of the business.
Life insurance may look simple, but it carries many secrets. Try to find out everything you can about yours and you may discover some hidden benefits as well.