Life Insurance

What is Life Insurance?

Life Insurance is a contract between an individual with an insurance company.  When someone dies, the insurance companies agrees to pay a beneficiary of a deceased insured, an agreed upon lump sum of money.  Generally, this payout is tax- free.

There are 2 types of life insurance:  Term Life and Permanent Life Insurance

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Term Life Insurance:

Term life insurance is the most popular form of life insurance offered within the United States.  Probably because it is the least expensive and you can purchase large amounts of death benefit for a small amount of money.

The reason being, 96% of these policies never pay out because people do not renew or drop their coverage.  This insurance is a pure money maker for insurance companies.

Term life insurance is a great way for young families to insure they have the proper coverage in case of the unexpected death of the earner or earners for the household.

Permanent Life Insurance:

Permanent Life insurance offers some very unique features.  All of these policies offer the policy owner cash value build up on a tax-deferred basis.  Withdrawals from these policies are considered a policy loan and are not subject to taxes.  Many  people around the United States and the world use Permanent insurance as a tax haven and as a savings program.  Also Permanent Life Insurance offers a death benefit.

There are 4 types of permanent life insurance policies.  They are universal, indexed, whole, and variable life insurance policies.

Indexed Universal Life Insurance:

IUL’s are similar to indexed annuities whereby the principal and yearly gains are locked in and are not subject to risk.  These life insurance contracts have grown in popularity and are the subject in many books.

If you are tired of 401K’s and Ira’s, you should look to funding your retirement using an indexed universal life insurance policy.  These policies have a yearly floor (guarantee) and have an upside on the S&P 500 from 10-15%.  No matter what happens, your policy will make money and your money is not subject to risk.

Whole Life Insurance:

This form of insurance has been around for over 160+ years and there are over 400,000 people within the United States that own these policies.  It is estimated that if only 10% of the population owned whole life insurance, our country would not have financial issues and more people would be able to retire in comfort rather than waiting for their Social Security checks to hit their banking accounts.

Most good policies have a 4% yearly guarantee with a dividend.  Make sure you choose a true mutual insurance company that is owned by its’ policy owners rather than share or stock holders.  Choose a dividend paying policy and you can expect a 2-4% extra added to your account on top of your 4% guarantee.
These policies are also designed as a way to finance your own or business purchases.

If done right, you will receive extra tax benefits and more income or cash value build up inside your policy which you can use to finance vehicles, weddings, pay for medical expenses and use for retirement cash flow.

Variable Life Insurance:

Variable Life policies have gained and dropped in popularity in recent years.  The reason being is that these policies are extremely expensive and your cash value can vanish due to market risk.  Our company does not promote these products to their inherent volatility.

Related Links:

Whole Life Insurance Quotes

Infinite Banking Concept

Dividend Paying Life Insurance

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