Achieving Generational Wealth with Life Insurance

malden solutions generational wealth with life insurance

This blog explains how you can achieve generational wealth with life insurance.

Is your financial goal to grow generational wealth? Permanent life insurance may pass tax-advantaged assets to whoever you select as your beneficiaries. However, not all types of life insurance provide the same guarantees. This blog explains how you can achieve generational wealth with life insurance.

Creating Generational Wealth Through Life Insurance

Permanent life insurance (includes variable, universal, and whole life policies) pays a guaranteed death benefit. They also have built-in savings known as cash value if you pay your premiums. Based on your policy, the cash value in permanent life insurance increases every time you pay off your premium. Sometimes, you will have guaranteed returns, and in others, the returns vary due to the performance of a sub-account or an index. In addition, some policies pay out dividends that may assist you in achieving wealth with life insurance.

Depending on your insurer’s interest rate and rate of return, it is possible to pull out a policy loan and still have net positive interest earnings. One life insurance type pays a guaranteed rate of return despite the outstanding policy loans. This means you can borrow a dollar and earn interest on it simultaneously. Remember, your policy’s death benefit goes to your heirs when you pass away, not the cash value.

Variable Life Insurance

Variable life insurance grows cash value based on the performance of market-based accounts like bonds, equities, and money market accounts. Also, you may insert your cash value into these accounts and achieve generational wealth with life insurance when the accounts do well. However, the cash will lose value in a market downturn. Therefore, working with a financial advisor or minimizing risk as much as possible is always ideal.

Universal Life Insurance

You can invest the cash value into these accounts (S&P 500 or investments held by the insurer) or keep it and gain a low, guaranteed rate of return. Fortunately, your policy’s rate of return will reflect that performance if you invest when these investments and indexes do well. Keep in mind that universal policies may cap growth, limiting your earning potential. However, they are slightly less risky than variable policies.

Whole Life Insurance

Whole life insurance earns a guaranteed rate of return when you purchase the policy. It stays protected in your policy and is available when you need to use it. Fortunately, there is no risk of losing cash value in this plan. You’ll also know how much your policy earns within a year and be able to budget for family expenses or investments accordingly.

The point is that you can achieve generational wealth with life insurance. Contact Malden Solutions today at 410-435-4937 to learn more about why life insurance is essential.

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Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.

This entry was posted on Tuesday, May 14th, 2024 at 11:33 am. Both comments and pings are currently closed.