Protect Yourself: Build a Flexible Foundation 

Are your financial assets safe? Predictable? Guaranteed? If you are like most Americans, you would like them to be. The good news is there are ways to make it happen if you consider various options. One is to build a flexible foundation.

Conservative but Steady Growth

People across America are taking a more conservative approach to their financial planning, priorities and preferences. Recent research conducted by Harris Interactive found:

  • 75 percent of respondents said they prefer financial products that are safe, steady and secure rather than those that pursue aggressive growth
  • 75 percent favor products with a long-term outlook vs. short-term
  • 67 percent prefer products with guarantees to those with potential.

There is one long-term financial asset, permanent life insurance, which stands out from the rest in providing safe, steady and guaranteed growth. It is the only financial tool that includes life insurance, offering lifelong protection against the risk of a premature death while accumulating cash value that can be tapped throughout life. Designed for long-term value, it has several advantages that other vehicles don’t.

A performance engine – Permanent life insurance policies from some companies are eligible to receive annual dividends, which can be taken in cash or used to cover or reduce out-of-pocket premium payments. They also can be added to the policy for continued growth, in which case they provide additional growth. While annual dividends are not guaranteed, Northwestern Mutual has paid them every year since 18721 and is the only life insurance company that has paid more than $60 billion in dividends to its clients over the past 25 years.

Access to cash – On a permanent life insurance policy, cash value is guaranteed to grow over time and can be enhanced by the dividends paid on the policy. Over timeframes of 20 years or more, that growth can be significant. Once it accumulates, your cash value is guaranteed and can be accessed on a tax-favored basis2 for business opportunities, retirement income, emergencies, or to pay policy premiums.

Predictable growth – The long-term value of Northwestern Mutual permanent life insurance is that the cash value growth has been steady and consistently good when compared to other options. It is guaranteed to increase every year and can never go down in value. The interest rate credited on the cash value has been relatively stable and has not been impacted to the same extent to the ups and downs of the market as other financial assets.

Tax benefit – One particular advantage of permanent life insurance is that its cash value grows tax deferred, unlike assets in savings accounts, CDs or mutual funds. You can access the money on a tax-favored basis whenever you might need it, without incurring a 10% penalty for example for taking the money before a certain age. There are no required minimum distributions from cash value, unlike other tax-favored investments such as IRAs and 401k plans. In the event of your death, your beneficiaries would generally receive the policy proceeds income-tax free.

Life-long protection – Once you own permanent life insurance, coverage lasts for your lifetime. Permanent life insurance is a great option to protect the lifelong needs of your family and for accumulating assets as part of a retirement plan. Premiums can remain at a level rate from year to year and as long as they are paid, beneficiaries will receive the proceeds upon the death of the insured, generally income-tax free. Individuals and business owners choose permanent life insurance to protect their families and business interests, and to leave a legacy for future generations.

Long-term financial security for your family – When you reach retirement age and have built cash value over decades, you have multiple options for accessing those funds. These options range from cashing in the policy, converting it to a guaranteed lifetime income, keeping a portion of the death benefit and accessing some of the cash value, or continuing the policy to protect your family and leave a legacy.

Your financial representative can help you decide which type of policy and options are best for you. The good news is that you can build the flexible financial foundation that will offer safe, predictable and guaranteed growth now and in the future.

1Dividends are not guaranteed, and are subject to change.
2Consult with your legal or tax advisor for specific legal or tax questions. Policy loans decrease the death benefit.