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4 reasons why whole life insurance is a good investment product

With changing economies and rising interest rates, how do you secure your financial future?

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Considering the fact that economies change, it doesn’t actually help if you keep your money in the bank. Saving for the future has its advantages, but then again, interest rates change and an increasing rate of inflation can totally wipe out your hard-earned money in just one go. Other than that, there’s also the risk of death or debilitating injury which can put your financial future in jeopardy.

For this reason, people should rather invest their money in options that allow for better growth, on top of protecting your lifestyle and your health.

So what’s the best way to utilize your savings? There are a plethora of investment options to consider, such as rental spaces and stocks. But if you’re seeking to secure your life and the future of your family from any eventuality, you might as well invest in a whole life insurance product that best fits your needs.

Whole life insurance is basically a type of insurance that allows your beneficiaries (that is, your family) to access an accumulated amount of cash once you pass away. Unlike most life insurance products, a whole life insurance policy does not have a maturity date. This allows you to pay your premiums for as long as you like. But now that we have touched on what whole life insurance is, what’s so special about it that you should consider getting such a policy?

Here are the reasons why you should get a whole life insurance product.

1. Cumulative cash value

Since you are allowed to pay your premiums however you like, you are able to build cash value at a fixed rate. This means that the value of your policy is guaranteed to grow at that rate regardless of how the economy’s faring. So, even if stock prices are in the red, you are still guaranteed hefty returns which you can withdraw.

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whole life insurance
Whole life insurance allows you to build cash value at a fixed rate. (Photo by only_kim via Shutterstock)

2. Tax advantages

Another reason why you should invest in a whole life insurance policy is that it’s not subject to taxes, so long as you don’t withdraw beyond a certain threshold. Other than that, the cash value of your policy enjoys considerable protection from creditors. This means you can freely use the funds whichever way you like without any added restrictions.

3. Passive income

Probably the best benefit that a whole life insurance policy can grant you is the fact that may be paid dividends from the funds you have accumulated. Depending on your insurance provider, you may or may not receive dividends. But if your policy has such a provision, you can use the funds to purchase additional policies or invest in other options. That said, be sure to find A rated providers offering whole life arrangements with a payout feature.

4. Access to cash at any time

Other investments have strict rules when it comes to withdrawing and reinvesting the money you accumulated. This is not the case with whole life insurance, which allows you complete freedom to use your money for any purpose. Although you still need to make interest payments, the good thing is that you have a ready source of funds you can use at any given time.

(Featured image by Solis Images via Shutterstock)

Desmond O’Flynn is Irish but he’s not into boxing. He writes about finance and investing, as well as world politics and global economy. He used to believe that he didn’t have the luck of the Irish since he failed his art class thrice, but this immediately changed after meeting his wife Katarina, a startup interior design consultant based in Dublin. He is also a financial adviser.

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