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In Reply to: whole life posted by joeseph on August 08, 2001 at 14:45:20:
In fact, you're wrong agent. The company doesn't keep your cash value, it is actually used to increase the death benefit. Why would the insurance companies do that, it pretty much defeats the purpose of whole life and tax deferred growth if they ever did that. Where you ever received that info is certainly a wrong source. You may want to correct them or it. When I do presentations, I show the prospective client what the potential is for that cash to grow to and provide for your family.
For instance, a $250,000 policy, purchased at age 25 (young yes, but an excellent choice), paying roughy $3200/yr would see a death benefit of roughly $$950,000 by the age of 60. At that age, the cash value could be $500,000 at our current dividend rate.
You'd be able to use this cash for whatever you choose, or wait 5 years, and annuitize the CV for life. Pretty nice.
Moreover, I don't know many financial vehicles that allow you to withdraw money, income tax free and still earn interest. If you did that with a mutual fund, you'd be taxed. And, sticking money in savings account yields very low interest, only enough to stay pace with inflation. And, substantial interest earnings on savings accounts amount to income tax liability. So where would you recommend sticking the money for sometime, tax deferred and still be able to accumulate a nice nest egg? I'd certainly think life insurance, and so would more people if they knew more about it. It also helps to pass on estates and inheritances. Virtually anything can be passed on income tax free by incorporating life insurance in the proper way.
Wise decision sir with the purchase!