It's not uncommon for life insurance to be something of an afterthought. Yes, you know you should have it. You might even have a good sense of why you should. But for some people at least, getting a policy in place can seem like another task you'll eventually get around to.
Here's why you might want to think again. The right life insurance strategy can help provide protection and flexibility for you and your family. In particular, cash value life insurance can provide you with a range of options.
CASH VALUE LIFE INSURANCE EXPLAINED
In a nutshell, cash value life insurance is a type of permanent life insurance with a cash value savings component. It also offers a pair of different benefits.
- The foundation of all life insurance is the death benefit, which pays an income tax-free amount to your beneficiaries when the insured person passes away.1
- The life insurance also acts as a tax-deferred accumulation vehicle. Cash value life insurance credits the contract holder using a predetermined method – dependent on dividends, interest rate, index return or subaccount performance – on a tax-deferred basis.2,3 The contract owner can access that at any given point via loans or withdrawals. For example, the cash value can be used as supplemental retirement income, a down payment on a house or an emergency fund.
The cash value can be used as supplemental retirement income, a down payment on a house or an emergency fund.
CAN I EVER TAP INTO MY INSURANCE?
Many contracts allow you to take a tax-free withdrawal up to what's known as your basis in the contract.4 What's your basis? It's the amount of premiums you have paid, minus any withdrawals or paid dividends. You already paid income tax on those dollars, so you won't be taxed again. Withdrawing money may come in handy later in life when you face expenses like college tuition or a parent's health care needs.4
LET'S TALK!
Here's another key point to note: There are numerous different forms of cash value life insurance, and each provides additional benefits the contract owner can use during his or her lifetime. To make an informed buying decision, it's critical to understand those differences and how they may align with your goals and needs.
That's not always an easy process, particularly if you're not up to speed on the nuances of each. But that's also where a Thrivent Financial professional can help you work through different scenarios and understand the type of insurance that works best for you.
Financial Tools to Meet Your Needs
No matter what stage of your Wise With Money Journey you're in, we can help you explore a wide range of financial products and services to help you reach your goals.
TERM LIFE INSURANCE
Term life insurance is typically the most affordable way to secure coverage for a set period of time. You can lock in a rate for a specified term – usually between 10 and 30 years.
INVESTMENTS
Whether you're a savvy investor or just starting out, we can help you tailor your portfolio to your needs and goals.
FINANCIAL PLANNING SERVICES
With our fee-based Financial Planning Services, you'll work with a Thrivent Financial professional who can provide ongoing, objective advice and help you create a holistic, personalized plan.
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MORE TO EXPLORE
7 COMMON LIFE EVENTS THAT CHANGE YOUR NEED FOR LIFE INSURANCE
Change is inevitable. When it happens, life's big events – the celebrations and the disappointments – may be ideal times to consider if the life insurance you have is what you want. And what you need.
SHOULD YOU CONVERT YOUR LIFE INSURANCE? CONSIDER THESE 3 FACTORS FIRST
Some term life insurance contracts allow you to convert your term contract into permanent insurance. Term life contracts expire after a set time period, or "term." Permanent life insurance can last for your lifetime. Should you convert?
HOW TO PREVENT UNEXPECTED EXPENSES FROM BUSTING YOUR BUDGET
You can't necessarily call unexpected expenses "unexpected." They arise for all of us. If you're not prepared for such pitfalls, they can quickly derail your financial life. Having an emergency fund in place can provide valuable protection.
1 While Thrivent does not provide specific legal or tax advice, we can partner with you and your tax professional and/or attorney.
2 Dividends are not guaranteed.
3 Past performance is not necessarily indicative of future returns.
4 Loans and surrenders will decrease the death proceeds and the value available to pay insurance costs which may cause the contract to terminate without value. Surrenders may generate an income tax liability and charges may apply. A significant taxable event can occur if a contract terminates with outstanding debt. Contact your tax advisor for further details. Loaned values may accumulate at a lower rate than unloaned values.
This contract has exclusions, limitations, reductions of benefits and terms under which the contract may be continued in force or discontinued. For costs and complete details of coverage, contact your Thrivent Financial professional.
If requested, a licensed insurance agent/producer may contact you and financial solutions, including insurance may be solicited.
THRIVENT IS THE MARKETING NAME FOR THRIVENT FINANCIAL FOR LUTHERANS. Insurance products issued by Thrivent Financial for Lutherans. Not available in all states. Licensed agent/producer of Thrivent. Thrivent.com/disclosures.
