At Tim Huber Insurance of St. Augustine, FL, we want you to understand the many ways insurance can benefit you. This blog explains how to use life insurance as an investment tool to save for retirement.
You can use insurance to fulfill the old adage, “Kill two birds with one stone.” That’s because if you buy the right policy, it functions as both insurance and investment tool. By choosing permanent insurance, you cover your impending burial costs, plus provide for your family. It also works to your advantage in four key ways as an investment tool.
- It provides tax-deferred growth. You pay no tax on the interest of the cash value component. You won’t pay taxes on capital gains, dividends or interest related to the life insurance policy until withdrawal.
- You can keep the insurance policy into old age – up to age 120. So long as you pay your premiums, you have coverage. Unlike term, you will still be covered past your 70th year. With improvements in health care, people live longer. This ensures you still have life insurance coverage, so your spouse or adult children do not get stuck with a surprise expense.
- Your insurance policy works a little like a savings account. If you want to take out a loan for a large purchase, you can borrow against the policy’s cash value. It functions as collateral and makes it easier for you to pay for college for your children or buy a house. Another plus is you can do it without paying penalties or taxes.
- You can access accelerated benefits if you fall critically or terminally ill. Depending on the policy, you can receive between 25 and 100 percent of the death benefit if you fall ill with a condition specified in your policy, such as end-stage renal failure, heart attack, invasive cancer or stroke. This lets you pay medical bills and improve your end-stage quality of life. While your beneficiaries won’t get the full death benefit, they also won’t be stuck with your medical bills. Even if you have health insurance, you’ll have to pay the deductibles.
Call or visit Tim Huber Insurance of St. Augustine, FL to learn more about how you can use life insurance as an investment tool. Why not obtain a policy that helps you in multiple ways? We can help. Call us.