Insurance Broker Explains if it Makes Sense to Have Both Term and Cash Value Insurance
As an experienced Insurance Broker, I get questions all the time from clients about Term and Cash Value Insurance. In most instances, it makes a lot of sense to have both term coverage that’s temporary in nature such as to cover a mortgage that’s a finite thing or young children until they graduate from college or even post-graduate education. Other coverage is more estate planning, final expenses, or it could be tied to wanting to have tax-free access to cash, especially in retirement. It would be very common for someone to take out a term policy for say two or three million to cover their most critical time period when they’re starting a family, buying their house, getting a business started, or investing into a retirement plan.
Also, when available, when they have full contributions into their retirement plan, when they’ve obtained their house, or when they have any student debt in order, they may want to have additional saving or investment. Using a life insurance policy will allow you to put this money and later be able to take it out on a tax advantage basis. It’s very critical for retirement planning as it’s very important to have not only a diversification in the types of investments we use for retirement, but the taxation of those accounts when they’re distributed to us.
If you have questions about term and cash value insurance, contact our professional Insurance Brokers for guidance. Let our knowledge work for you.
This educational blog was brought to you by Insurance Broker Michael J. Bruno, seasoned Chartered Financial Consultant, Chartered Life Underwriter and Registered Health Underwriter. Specializing in financial planning and life insurance for physicians and dentists for over 30 years.