There is one certain event in our lifetime and it is one that cannot be avoided.
Personally, I would call these policies "Death policies" (by definition, since the benefit is payable under only one event, peril or loss: Death.
There are several types of life policies available:
* Term life, it's the most affordable, easier to write, and effective life insurance protection available in the market. The biggest downfall: It is only good for a set period of years and the money paid into these policies do not build value.
* Whole life, level premium, builds cash value, guaranteed return of monies at certain attained age, and lifetime benefit. The biggest downfall: It is certainly not the cheapest insurance available in the market.
* Universal life, a more recent hybrid version of term and whole policies. It offers flexible payments, permanent life insurance, guaranteed growth (a typical guarantee in fixed products).
* Variable life, which is closely related to the movement in the stock market -and required specific training to your insurance agent-, it offers more opportunity to build cash value as it if fluctuates with the stock market. The biggest downfall: Cash value and benefit could vary or even lost.
All these types of policies offer one unique benefit: Tax free benefits. When a policy pays out a benefit, whether it is $500 or $5 million, it is considered free of tax. YES !!! That means that compared to other methods, your descendants are not going to worry about paying taxes on the benefits of a life insurance policy. Yes, that means FREE of IRS letters. Other type of law enforcement may knock in the their door if there is suspicion the benefits were paid for reasons other than involuntary, accident or as a consequence of a disease (i.e. fraud) BUT that is not the general rule neither the purpose of our short explanation.
BUT the common idea that ALL life policies only offer benefits when we die has been revolutionized. In effect, the "smart" people nowadays, or the "rich" have found this to be an effective and safe method of money multiplier.
There are ways to save for retirement using life policies. How ? It is very simple, but it is a bit long for a few lines available here, so I would like to answer those questions to you personally (I am sure you would have a lot of questions about it).
So, give us a call, and allow us to explain the differences for you.
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