Life Insurance has always had a stigma of being hard to discuss, a sad topic, something to think about when you get older or even just completely thrown off the table. However, in reality this impression is wrong; Life Insurance really should be treated in the opposite way. Life insurance is a happy discussion about the topic of a long healthy life ahead, planning career growth, making smart investments, and saving more money to ultimately build long-term legacy wealth. Life insurance is about setting up long-term coverage that by the time you are older and do inevitably one day pass away from old age, the policy will be there with a value left for your spouse or the next generation. Additionally, in this article we will discuss how Life insurance can actually work for you while you are alive. The best time to discuss Life insurance, explore options and setup a policy is while you are young (starting in your early to mid-twenties), healthy and working on building your career. If you haven’t set up a policy yet, it’s never too late to do so now.

Too-often life insurance is discussed way too late in one's life and by the time most people think they need it they are either much older, sick, worried about the future and ultimately not in the same position to get the policy and rates they could have if they set it up when they were young and healthy. So don’t wait until you are old, sick, or facing life struggles to finally think about Life Insurance and how you can protect the life and family you are building. With a policy setup today, you can ensure that all the work and wealth you have accumulated throughout your life is insured, secured, and will be there regardless of what life throws down your path.  

How Life Insurance can work for you during your life:

Not only does life insurance have applications for providing financial protection of your wealth after you pass away, but it also has real financial applications for you while you are alive that many people do not know about.  

1. Investments & Tax-Free Growth:
   Depending on the policy you choose, you will have access to different investment options with your Life Insurance policy. This means that apart from the guaranteed death-benefit in your policy, any money (beyond your premium payment) put into the policy builds a cash value (CV) which is invested and growing tax-free. With a Universal Life insurance policy you can build a custom portfolio of Exchange-Traded Fund’s (ETF’s), Index Funds and Guaranteed Investment Certificate’s (GIC’s). Whole Life Insurance offers Guaranteed investment growth with insurer-managed portfolios and the ability to earn annual dividends.
    

2. Borrowing Against your Policy:  
   When you purchase a life insurance policy, a percentage of the CV portion of your policy can be borrowed against tax-free with a secured loan. That means that while the policy is open and active if you ever have a need for access to the money, or need to get a loan, the life insurance policy will be available to help quickly achieve this for you. A major benefit of this type of financing arrangement is that when you borrow against the policy, all the money in your policy stays in the policy untouched and continues to grow, meanwhile you still obtain the money you need to make important life purchases. If by the time you pass away the loan remains unpaid, it is very simply paid off prior to paying out the remaining death-benefit balance in the policy to your family. This means if the policy has a larger value, then loans outstanding, all debts would automatically be covered, and your family would still receive a tax-free payment for the remaining amount. Important Note: Depending on your policy terms and timeline, only a percentage of the CV value can be borrowed.

So, How does Life insurance work?

To put simply, life Insurance is insurance on your life. With permeant life insurance (like Universal Life or Whole Life) it lasts your entire life as long the premium payments are made. What this means is the same way you purchase insurance on your car, your home or even your pet you can also purchase insurance on your own life. Throughout your life you will save money, you may eventually purchase a car, purchase a home or make investments; all of these have real financial value attached to them and the goal of life insurance is to obtain protection and secure those values to ensure that if something were to happen to you, or when you ultimately pass away from old-age that everything you have accumulated throughout your life is passed on to your family, spouse, or next generation completely tax-free. This is done by purchasing a life insurance policy (Universal Life, Whole Life or Term Life) for the value of everything you’d like to protect. The payout from a life-insurance policy when you pass away would be in the form of a tax-free death benefit to the beneficiaries you have assigned to the policy. The value of the policy, timeline of protection, and other aspects (such as your age, health, gender and occupation) will determine the premium you will pay. The premium amounts and payment dates for the policy are tailored to ensure they are always affordable for you at every step in your life and never change (even as you get older or your health changes).

Making sure you set up the correct life insurance policy that matches the coverage you need, meets your financial goals, your timelines, and has premiums that are affordable for you is extremely important to us at Kinley Financial. If you choose to work with Kinley Financial we will first explore a Financial Needs Analysis and make a policy