When you list the financial assets on your balance sheet, you might think immediately of your house, vehicles, retirement funds or financial investments. In fact, you may have more assets than you realize, especially if you own life insurance. Another essential element in your financial plan, your life insurance offers benefits that other assets don’t.
Beyond the familiar death benefit, permanent life insurance has several valuable advantages that both expand and protect your financial security. Backed by the strength and stability of Northwestern Mutual, permanent life insurance is an asset you can count on. Here are some of the additional opportunities it offers:
- Access to Cash
Once it accumulates, your life insurance cash value is available for family and business opportunities, education funding, retirement income, emergencies, or to pay policy premiums. You can withdraw a portion of the cash value, access it through a policy loan, or use the policy as financial collateral.*
- Asset Protection
You have worked hard for what you have, and life insurance can offer protection from unexpected financial changes. It can offer a financial fall-back when needed and offset the impact of estate taxes upon your death. The death benefit also can replenish funds that may have been depleted during your life, so surviving family members have what they need to live comfortably and achieve their goals.
- Consistent, Safe Accumulation
Permanent life insurance cash values are guaranteed, meaning you will always have access to the assets you accumulate, which adds safety to your balance sheet. It also offers sustained growth with little volatility because Northwestern Mutual’s portfolio approach helps to shelter your assets from market peaks and valleys. Our commitment to mutuality returns "profits" to policyowners through dividends, and although not guaranteed, they have added to the value of Northwestern Mutual life insurance policies since 1872.
- Flexibility with Less Restriction
You access your accumulated cash value without restrictions that exist on other assets. For example, you won’t pay a 10% penalty if you withdraw the money before a certain age, and there are no required minimum distributions, unlike other tax-favored investments such as IRAs and 401k plans.
- Long-term Financial Security for You and 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.
- Protected Insurability
As long as premiums are paid, permanent life insurance provides coverage throughout your life, even if health or personal situations change. Buying permanent life insurance for young people locks in their insurability, and adding an Additional Purchase Benefit option to a life insurance policy allows coverage to be added later regardless of circumstances.
- Tax-advantaged Growth and Distribution
Permanent life insurance cash values grow on a tax-deferred basis and are generally available income-tax free, through either policy loans or withdrawals up to the policy’s cost basis. In the event of your death, your beneficiaries would generally receive the policy proceeds income-tax free.
With the unique benefits of accumulation, tax advantage and financial flexibility – in addition to the death benefit – permanent life insurance can be a strong addition to your balance sheet and the foundation for your financial security. Contact a financial representative to help you identify the best options for incorporating this important asset into your financial plan.
*It may take several years for significant cash value to accumulate, and when you access cash value in the form of policy loans, the death benefit is decreased by the amount of outstanding policy loans.