Every one seeks financial security but it seems like few attain it.   Believe it or not financial security is not hard to attain.   By using the right financial tools to guide you, achieving financial security will be much easier.

A financial pyramid is the all-encompassing financial tool because it covers all basis and is great reference source.

The bottom base of the pyramid should be life insurance; the next level should be your savings accounts and a 6 month emergency fund; then your investment accounts such as your 401k’s, IRA’s, stocks and bonds.

Life insurance is the first level of your financial pyramid because of the solid financial foundation it provides for you and your family.

Everyone needs to own some life insurance; the amount and the type is what may differ; but the foundation of life insurance is a must.   There are different types of life insurance; we will focus on one type, whole life insurance.

Financial Security and Whole Life Insurance

Whole Life Insurance

• Whole life insurance is sometimes called Permanent Life Insurance.
• It is permanent because as long as you pay the premium, the policy will not cancel.
• Whole life insurance is intended to provide coverage for the life of the insured.
• Premiums are paid throughout the life of the insured.
• The premiums on a whole life policy are usually paid until the insured reaches age 100.

Guaranteed Cash Values

• Whole life insurance policies provide guaranteed cash values.
• The cash value benefit is why whole life insurance is different from term life insurance.
• Term life insurance policies do not have guaranteed cash values.
• With whole life, the insured does not have to die to benefit from the policy.
• A whole life insurance policy has living benefits unlike term.
• Accumulated cash values are one example of  living benefits.
• The cash value in a whole life insurance policy is a nice benefit in today’s uncertain economic times.
• The cash value grows within the life insurance policy income tax deferred.
• The cash value is taxed at the time of withdrawal.
• The cash value is not taxed if you borrow against it.    So in tough economic times, policyholders can use their cash value.

Guaranteed Death Benefit

• This benefit provides the insured and their families with peace of mind.
• You know that the financial support will be there for your family, if you are not.
• The death benefit is payable to the beneficiaries upon the death of the insured.
• The beneficiaries in a whole life policy should be updated when life situations change.
• Beneficiaries may need to be changed with marriages, deaths, divorces, additional children.
• The beneficiaries can usually be changed simply with a letter to the insurance company.
• Be sure to always have a primary and secondary beneficiary.
• If the insured and the primary were to die at the same time, the secondary beneficiary steps up.

Building life insurance into your financial pyramid is a smart move for protecting the financial security of you and your family.   And with all of the positive benefits built into a whole life insurance policy, it may just be the life insurance policy you need to discuss with your life insurance agent.