Cash value life insurance is more than just protection. It’s like a two-in-one deal – you get life insurance coverage plus a savings account that grows over time. Think of it as a way to protect your loved ones and build your financial future at the same time.
How does cash value work?
With cash value insurance, part of your premium goes towards your life insurance coverage, and the rest goes into a special savings account within your policy. This account earns interest over time, and the value grows tax-free. You can even use this money for things like:
- Paying your premiums: If you need a break, your savings can cover them.
- Getting a loan: Borrow against your policy’s cash value for emergencies or opportunities.
- Increasing your coverage: Use your savings to buy more protection for your loved ones.
Types of cash value insurance
There are a few different types:
- Whole Life: Your premiums stay the same for life, and your cash value grows at a steady rate.
- Universal Life: More flexible premiums and investment choices, but the cash value growth isn’t guaranteed.
Pros and cons
Let’s be honest, cash value insurance has some upsides and downsides:
Pros:
- Build up savings while getting insured.
- Your cash value grows tax-free.
- Use your savings for various purposes.
Cons:
- It’s usually more expensive than term life insurance.
- There may be fees associated with the cash value account.
Still curious?
Cash value insurance is a powerful tool, but it’s not right for everyone. Chat with an easyLife expert to see if it fits your needs and learn how to make the most of it!