Whole Life Insurance Summary
Notes
Whole Life insurance is not your traditional insurance. Nearly all insurances we own, insure an unknown. For example, car insurance is something we may or may not use while we own it. It's only ever used if an unknown item like an accident does in fact occur.
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Whole life insurance removes this issue. While we do not know when we will pass away, we will at some point. Whole life insurance allows you to properly plan for this known occurrence.
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In addition, whole life insurance has cash value growing each year within the policy. This is money you have access to via borrowing or withdrawing.
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​At Cash Value Acumen, we own multiple whole life policies. One is for retirement supplement, another for real estate investment, and our kids policies are for education costs and generational transfer of wealth.
Next Steps
In order to review whole life coverage further, an application is required. Once submitted, we have our underwriting team begin the review process for approval.
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Before applying however, whole life insurance requires more care and conversation. While term insurance is mostly black and white, whole life insurance demands attention to detail.
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We have an upfront questionnaire that can be filled out to start the conversation. This allows us to get a better sense of what you are trying to accomplish, and how we can help.
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​Our conversations come at no cost to you; Only when you are approved and decide to pay for the plan.
Whole Life Takeaways
You may have done some research upfront and like the idea of whole life insurance. Here is a quick refresher on key advantages you will see with whole life coverage:
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1) Permanent coverage that guarantees the death benefit payout
2) Cash value access, providing a living benefit
3) Tax advantages with the cash value, and death benefit for estate planning
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​Whole life insurance should not be a generic purchase. It's important to work with plans that will accomplish your objectives, and give you the greatest advantage. Listed below are key items we mention at Cash Value Acumen.
Account Comparison
Since the cash value within a whole life policy grows over time, people like to compare rate of return. Comparing these accounts to financial platforms like stock accounts, retirement accounts, real estate investments, etc. would be a mistake.
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These policies are closely resembled to bank accounts. They have easy access to the funds, no risk, great leverage opportunity, and low cost. The reason we prefer these over banks, is the distribution of profits. When we give banks our money, they re-invest it for greater gain, while giving us hardly any benefit in return. With the insurance company however, they have to return their profits to the policyholder, holding them accountable for ultimate gain.
Mutual Companies
There are mutual insurance companies, and their are stock insurance companies. When working with a stock insurance company, the profits of the insurance company are returned to the stockholder first, then the policyholder.
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​We prefer to use mutual insurance companies with our whole life insurance designs. They are designed to profit, in order to return dividends to the policyholders first. There is no additional middle man along the way. We also prefer mutual companies due to their overall financial rating and tenure. The few we do work with have been around since the civil war, and have only missed one year of dividend payments (which occurred during the great depression).
High Early Opportunity
One of the main issues with whole life insurance is the upfront access to the cash value within the policy. In most instances, after you made your annual premium payment on the first year, you would have no access to any of the cash value. In years two and three you would have some access, but it would be at a small amount, such as 15 - 20% of the total amount you put in.
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​We like to design insurance contracts that will do well in the long run like many traditional whole life plans, but have as much access to the cash value as possible - day one. This is done in order for individuals to access funds sooner for other opportunities, maximizing the overall potential of what the whole life insurance plan can do.