Permanent Life Insurance is not just for the Wealthy.
Permanent Life Insurance is important, and everyone should have some – your net worth has nothing to do with it. Without permanent life insurance, you may be putting your family’s financial future at risk.
There are two types of insurance: term and permanent. Let’s look at why high net-worth individuals love permanent life insurance. After all, they have a lot of money to leave their families, so why do they care about purchasing life insurance?
Individuals With a High Net Worth and Low Net Worth
You may be surprised to find out that individuals with a high net worth aren’t much different than you. For starters, most of them are down-to-earth and work hard for their money so they can build and maintain their lifestyle, just as you do. Secondly, they also don’t like to overpay for things and they expect value for their purchases.
Why do High-Net Worth Individuals Love Permanent Life Insurance?
Below are some of the reasons why wealthy individuals often choose to purchase permanent life insurance:
- Liquidation of assets: Right after they pass away, money probably won’t be available in cash to cover final expenses and they don’t want their families to have to worry about things they don’t need to while they’re grieving.
- Income replacement: The wealthy also worry about money; they just do it on a different scale. When main income earners pass away, they know that their family still needs their income.
- Prosperity: They want the security of knowing that the money they worked so hard to make will benefit their grandchildren.
- Future Costs: They know that anything can happen in life, so they analyze the future needs and possible events in the lives of their families when they’re gone, and use their permanent life insurance policy to take care of them.
- Acts as both an asset creator and asset protector: Permanent life insurance has an investment component (which is an asset) that term life insurance doesn’t, so they use it to create wealth and protect their assets because it’s money that is free from taxes and creditors. No matter what happens with their other assets, they know that their family will have this protection.
- Non-reliance on the market and regulatory change: The money invested in a permanent life insurance policy isn’t affected by the market as strongly as other investments. As well, regulatory changes will always balance out in favour of insurance companies.
Think of it this way, permanent life insurance is used to insure a life, and the importance of one’s life doesn’t rely on their net worth – everyone is valuable.
All life insurance products are awesome – term life insurance and permanent (whole life, universal), but they all serve different purposes beyond insuring your life. The only thing you have to worry about is getting the wrong type of life insurance.
Thankfully, an experienced life insurance agent can help you assess your needs to ensure you buy the right policy for your situation; be it a term or a permanent policy.
Permanent life insurance has benefits for everyone. If you want to see how a whole life or universal life policy can protect your family and form the foundation of your estate plan, please call us at 1.888.498.5288.