What is Dividend Paying Whole Life Insurance?
Whole life insurance is a type of permanent or “cash value” life insurance that provides benefits for the “whole” of your life (versus term insurance that only lasts for a specific period of time)
Some companies offer dividend paying whole life insurance policies which means the policies pay dividends. Dividends are not guaranteed, however some companies have paid them every single year for over 100 years, including during the Great Depression.
Whole life policies have a guaranteed, pre-set annual cash value increase.1 The guaranteed increases are based on a “worst-case” financial results scenario projected by the insurance company. Then, at the end of the year, the company does an accounting of the death claims paid, their earnings, and the expense of running the company and the premiums it collected. If they did better than their worst-case projection, they pay the policy owners a dividend.
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A few of the many benefits of dividend paying whole life insurance include:
- A level premium guaranteed never to increase, thus giving you some protection from inflation
- A guaranteed death benefit
- Tax-deferred cash value accumulation
- The ability to borrow from your cash value, allowing you to become your own source of financing and bypass banks, credit card and finance companies
- The ability to have a guaranteed, predictable income in retirement, without the risk or volatility of stocks, real estate and other investments1
Suze Orman and Dave Ramsey’s Big Blind Spot…
Financial gurus such as Suze Orman, Dave Ramsey and others will tell you whole life insurance is a lousy place to put your money. However, the policies they talk about are NOT dividend-paying policies. In a dividend paying whole life policy, both your cash value and your death benefit grow by an exponentially increasing amount.
The kind of dividend paying whole life insurance discussed on this website and in the best-selling book, Bank On Yourself, includes little-known riders or options that grow your cash value up to 40 times faster than the policies Orman, Ramsey, etc. talk about, especially in the early years of the policy. Structured this way you’ll have cash value in your first month and can use the policy as a powerful financial management tool right from the start.
However, no two policies are alike. Yours would be custom-tailored to help you reach as many of your short-term and long-term goals and dreams as possible, in the shortest time possible. To find out what your bottom-line numbers and results would be if you added Bank On Yourself to your financial plan, request your FREE, no-obligation Analysis now. Discover how to have a guaranteed income in retirement that you won’t outlive!
Why haven’t you heard about these specially-designed policies?
The two biggest reasons are that the insurance agent or financial advisor receives 50-70% LESS commission when structuring your policy this way. That’s because a large portion of your premium is directed into a rider that turbo-charges the growth of your cash value, but only pays the agent a very small commission. And because only a handful of companies offer this type of policy, it’s not even covered in the traditional training and certification programs agents take.
Learn how to find a Bank On Yourself Authorized Advisor willing to reduce their commission by 50-70%.
Learn the three key differences between “Bank On Yourself-type policies” and the ones most advisors talk about.
Whole life versus universal life and equity-indexed universal life: which is best?
One more thing and it’s important – no other type of permanent or cash value policy comes with as many guarantees as whole life insurance. The only part that’s not guaranteed is the dividend (which is why we recommend using a company with at least a 100 year track record of paying them).
Today, many agents are pushing universal life and equity-indexed universal life, which can look good “on paper,” but in real life don’t hold up to their promises. (They can show returns of 10% or even 12% a year. A whole life policy can only be illustrated at the guaranteed rate and the rate based on the current dividend.)
Universal and variable life policies have an investment account wrapped up in them. Most people already have way too much of their savings invested in the stock market, which is one big reason so many Americans are in the financial pickle they’re in today!
For a fair and unbiased comparison of whole life versus universal and equity-indexed universal life, check out these two articles:
Take back control of your financial future…
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