Choosing the best whole life insurance can significantly impact wealth planning.
Whole life insurance offers financial security, steady growth, and peace of mind. But not all whole life insurance policies are built equally.
So how do you find the best whole life insurance policy for your needs? In this article, I’ll point out some key things to consider.
I co-authored the bestselling book What Would the Rockefellers Do? with Garrett Gunderson. In it, we reveal the best whole life insurance in great detail. Get your free audiobook or hardcover copy to learn more.
Understanding Whole Life Insurance
Whole life insurance is a permanent life insurance policy that covers the insured’s entire lifetime.
Term life insurance only offers coverage for a specific period. In contrast, whole life insurance builds cash value over time.
This, among other benefits, makes it an excellent tool for insurance planning in wealth management.
Benefits of Whole Life Insurance
The benefits of whole life insurance make it ideal for wealth planning:
- Lifetime Coverage: Provides peace of mind knowing your beneficiaries are protected.
- Cash Value Accumulation: Grows over time and can be accessed during your lifetime.
- Guaranteed Interest Rate Plus Dividends: Your cash value grows at a guaranteed interest rate. Plus, you will typically receive dividends.
- Tax Benefits: Offers tax-deferred growth and tax-free death benefits.
- Access to Cash Value: You can access your cash value in the form of policy loans. You can use policy loans to fund investments, education, consumer loans, etc.
- Stable Premiums: Fixed premiums that don’t increase over time.
- Liability Protection: Your cash value is protected from creditors and lawsuits.
Many people ask, is whole life insurance a good investment? Technically, we view it as a savings alternative to banks with many other benefits.
But there’s a reason why the wealthy don’t “buy term and invest the difference.” The wealthy use whole life insurance as the foundation of their wealth planning. Garrett Gunderson and I explain this in detail in our bestseller What Would the Rockefellers Do?
Best Whole Life Insurance Companies
Choosing the best whole life insurance company is crucial for maximizing the benefits of your policy.
The best whole life insurance policies are from companies that meet all these criteria:
- A Ratings: The company must have A ratings across the board with Moody’s, A.M. Best, Standard & Poor’s, etc.
- 100+ Years Old: Look for companies that have been around for at least a century.
- Solid Dividend History: Make sure the company has paid dividends every year, including during world wars, recessions, depressions, etc.
- Loan Provisions: Make sure that there is a fixed interest rate option.
- Convertible: Make sure that the company’s term insurance rates are competitive and convertible to whole life.
- High Early Cash Value: Make sure that your policy can be designed to allow for high cash value as quickly as possible.
- No Barriers for Optimally Funding: Make sure there are minimal fees and expenses for optimally funding your policy. (Some people call this overfunded whole life insurance.)
- Guardian Life
- Lafayette Life Insurance Company
- MassMutual
- New York Life
- OneAmerica
- Penn Mutual
Choosing the Best Whole Life Insurance Policy
Not all whole life insurance policies are created equal. The best whole life insurance policy includes several factors to ensure it meets your specific needs and financial goals:
1. Coverage Amount
Determine the coverage you need based on your financial goals and obligations. Consider factors like outstanding debts, future education expenses for your children, and your family’s living expenses.
A thorough assessment of your current and future financial needs will help you select a coverage amount that protects your loved ones.
We use the human life value approach to life insurance to determine your coverage needs.
2. Policy Features
Look for policies that offer additional benefits, like riders for long-term care or disability. These riders can provide valuable coverage for unexpected events that could deplete your savings. These features can enhance the overall value and utility of your whole life insurance policy.
3. Cash Value Growth
Choose a policy with a strong track record of cash value growth and dividend payments. Examine the insurer’s history of dividend payments. Consistent dividends can significantly boost your policy’s cash value over time.
4. Premium Structure
Consider how the premiums fit into your budget. Fixed premiums provide stability, ensuring your payments remain the same throughout the policy’s life. This can make financial planning more accessible, as you won’t have to worry about increasing costs.
Importance of Policy Design
Proper policy design is critical to maximize the benefits of whole life insurance. This includes:
- Optimally Funding: Contributing more than the minimum premium to increase cash value growth.
- Riders: Adding features like waiver of premium or accelerated death benefit riders.
- Dividend Options: Choosing how dividends are used, whether reinvested, paid out, or used to reduce premiums.
Work with an experienced advisor to customize your policy according to the Rockefeller Method of wealth planning. This can include adjusting coverage amounts, selecting riders, and setting premium structures.
Maximize the Benefits of Whole Life Insurance for Wealth Planning
At Vault AIS, we follow a unique approach to help you maximize the best whole life insurance for wealth planning. Our approach focuses on three key areas:
1. Capitalize
We help you capitalize on your policy by maximizing the cash value growth. This involves proper policy design and optimal funding strategies.
Optimally funding your policy means contributing more than the required premium. This allows your cash value to grow faster. By doing this, you increase the death benefit over time and create a significant financial asset that you can use during your lifetime.
2. Utilize
Utilizing your policy involves accessing the cash value for opportunities like investments, business growth, or emergencies. We guide you on how to leverage your policy without compromising its long-term benefits.
This means knowing when and how to take loans against your policy. This can be done without the tax implications associated with other types of loans.
Using the best whole life insurance as a financial tool can provide liquidity for potential opportunities. It allows you to act quickly and strategically.
3. Systemize
Systemizing ensures that your policy works seamlessly with your overall financial plan. This includes integrating your policy with other investments and ensuring it aligns with your long-term financial goals.
Our comprehensive approach considers all aspects of your financial situation. This includes retirement planning, estate planning, and tax strategies.
We help you coordinate your whole life insurance policy with these elements. We help you create a cohesive plan that maximizes your financial security and growth potential.
Want to learn more about the best whole life insurance? Get your free audiobook or hardcover copy of What Would the Rockefellers Do?