Life insurance functions as a financial planning tool for retirement as well as protection for one’s family in the event of the insured’s death. A life policy with a cash value account lets Pembroke Pines, FL residents save for the future while providing for your beneficiaries in death.
Many people only know of life insurance as a tool for providing for their funeral costs and a death benefit for their spouse and/or offspring. McCormick Insurance Inc. wants you to know that life insurance also provides a method of wealth building as well so long as you choose a policy with a cash-value account.
These accounts provide the typical death benefit of a life insurance policy, but also have a savings account attached. These accounts either link to a money market account or an investment account that earns in relation to a stock index such as the S&P.
While they once only served the high-income set, the insurance industry has developed products for those with average incomes as well. These policies start with a death benefit of about $70,000 and allow the policy owner to build an account that lets them avoid paying taxes on the savings as well. Similar to contributing pre-tax benefits to an IRA, the money going into the cash value account comes from the premium payment and into a savings account managed by the life insurance company.
This method of financial planning lets the policy owner provide protection to their family or another beneficiary while also building wealth tax-free. The money does incur taxes, but typically at the standard rate if the policy owner withdraws it for use while living. This occurs also if the individual uses it as collateral for a loan.
These accounts can help Pembroke Pines, FL residents save for their future while protecting the financial future of their families as well. Contact McCormick Insurance Inc. today to learn about your life insurance options.