The Power of Cash Value Life Insurance

Selecting the right life insurance might be one of the most important financial decisions you will make. To help you make a well-informed decision you need an understanding of the kinds of life insurance and how they can benefit you.

There are two basic types of life insurance: term and permanent.

1. Term insurance is often purchased to cover a temporary need. It generally lets you pay lower initial premiums than permanent coverage.

2. Permanent insurance can provide the opportunity for a lifetime of protection. Additionally, it provides tax-advantaged income and tax-deferred cash value.

Unlike term life insurance, permanent life insurance may offer cash value that can help give you the confidence that you are protecting your dreams. Along with lifetime insurance protection, it can help you grow your wealth and future income.

-Three ways to benefit-

Carolina Advisors Group offers three primary types of cash value life insurance:

1. Universal life
2. Indexed universal life
3. Whole life

Each offers the following unique benefits:

• An income tax-free death benefit to your heirs. You can pass on a greater legacy to your beneficiaries because they will not pay income taxes on the death benefit they receive.

• Tax-advantaged growth of your assets. Incorporating cash value life insurance as a component of your retirement plan gives you the opportunity to grow your assets tax-deferred — whether through fixed, or indexed accounts — and helps achieve your long-term financial goals.

• A source of tax-free income for retirement — or for other goals — through
  withdrawals or loans. As you look at your retirement strategy, your advisor can help you create a balanced approach that includes sources of taxable, tax-deferred and tax-free income in retirement to help you meet your retirement savings goals. Cash value life insurance is one of the relatively few retirement accumulation tools that can provide you with a potential source of income tax-free supplemental retirement income. Keep in mind, accessing policy cash value through loans and surrenders may cause a permanent reduction of policy cash values and death benefits.

• A fixed account option. The value of some fixed assets can be negatively impacted when interest rates go up. Fixed account rates in cash value life insurance follow interest rates and increase with them.

Before you purchase life insurance, be sure to ask your financial advisor about the policy’s features, benefits, risks and fees, and whether they think the life insurance is appropriate for you based on your financial situation and objectives.

• How your cash value grows

Each cash value life insurance policy offers the option to grow your cash value safely within a fixed account that pays a guaranteed interest rate. Indexed universal life provides additional opportunities for growth of your cash value through indexed accounts. All guarantees are backed by the continued claims-paying ability of the issuing company.

Universal life

• Cash value is credited with a current fixed interest rate.

Indexed universal life

• Cash value in the indexed account is credited with a rate based on the performance of a well-known index.

• In exchange for a cap on the growth, the cash value is protected from negative returns through a guaranteed floor.

Whole life

• Cash value will increase by dividends, which can be used to buy additional paid-up life insurance or be distributed to the insured.

Which is right for you?

Meet with your financial advisor to learn more about how cash value life insurance can benefit your financial planning strategy.

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