Protect Savings with Life Insurance

In order to protect saving with whole life insurance policies, you must be aware of the term stipulated in the contract and the state laws. A whole life policy has tax-free cash value that can be accessed through withdrawals and loans. The withdrawals are taxable if the policy is considered a modified endowment contract (MEC). Furthermore, the loan can be subject to variable rates and interest.

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Choose the Life Insurance Beneficiary

There are two types of beneficiaries, the primary life insurance beneficiary and the contingent. The policyholder can designate a person that he or she new or a class of individuals, such as the children. If you want to make sure the investment you worked so hard for is in good hands, consider establishing an Irrevocable Life Insurance Trust, or ILIT.

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What Are Life Insurance Dividends

Life insurance dividends are only received from whole life participating policies. It is not an advantage that is supposed to convince you to switch from a term to a whole life policy. Participating policies have higher premiums. Furthermore the dividends are not guaranteed so you are better off investing your money in something else.

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Life insurance annuity

As all investment plans, a life insurance annuity can come in different shapes. You can either choose to pay its value at once or over time. You can receive fixed payments or you can risk and choose variable payments depending on the company’s level of performance. Furthermore you also decide the moment when you want to start receiving the payments.

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