How Life Insurance Can Help You Grow And Protect Your Wealth06 Mar 2021
Life insurance acts as a financial safety net for your loved ones in case you are no longer around. But are you aware that it can also help you grow and protect your money, by serving as an additional source of income?
Here’s more on what you may not know about this particular life insurance benefit:
1. Investment-linked insurance can help you earn via investment funds
An investment-linked insurance plan (ILP) is another type of life insurance. It is similar to whole life insurance but includes an investment component where part of your premiums are invested in funds of your choice.
ILPs also have a cash value, which is accumulated over time and paid to you once your policy ends. However, the earnings you get from this portion of your ILP is not guaranteed, as the amount will depend on how well your chosen funds perform.
And just like the cash value from a whole life plan, an ILP’s cash value is also available for you to withdraw from or borrow against, in case of an emergency.
2. You can potentially get extra income with life insurance
Some life insurance plans covers you for life, typically up to 100 years old.
It has an additional feature called a cash value, which comes from a portion of your premium. The amount, which is guaranteed, is accumulated overtime and paid to you once your policy matures.
This cash value feature makes your policy more valuable, as you are able to access the funds for any reason while you are still alive. For instance, you can use part of your accumulated cash value as payment for your premium during times when your cash flow may be tight.
Some life policies also offer cash bonuses or annual payouts in addition to a cash value, though the amount may or may not be guaranteed.
3. A life endowment plan gets you long-term savings and protection with a short-term commitment
An endowment is a savings plan that includes a life insurance component.
But unlike regular life insurance where you pay your premiums until your policy matures, a life endowment plan only requires up to ten years of premium payment for you to enjoy long-term cash savings and insurance protection, along with other guaranteed benefits.
The payout you get from this other form of life insurance coverage can serve as an alternative source of your retirement income.
With these types of life coverage, you can enjoy financial protection and grow your income at the same time. This shields you further against any financial loss and risks while you are alive, and can also help you avoid a policy lapse.