So many individuals have often wondered how they can use their life insurance policies as tools for investing. They often are confused as to whether they should consider life insurance a liability or an asset. Life insurance has proved time and again to be the best option when it comes to protecting your family in the long run. The main difference is always whether the individual is using permanent insurance or term insurance when it comes to life insurance as an investment tool.
Very many people more often than not end up taking term insurance simply because it is cheaper and also because it has specific periods of time such as five, ten, or twenty years. Term insurance may not be favorable to everyone especially in this day and era where people more often than not end up living longer. The cost of life insurance for a 55 year old individual is more often than not over the roof even if he or she is perfectly healthy simply because of their old age. An experienced and disciplined investor would find a way to make it work most probably by buying a term insurance and later on investing the difference. Learn about the Top Quote Life Insurance here!
However, this might not be the best way to invest your life insurance as it will most probably give your heirs a lot of taxes to pay. After you pass on, your investments and properties will be passed on to your heir but they will still have to pay tax for the inheritance but a life insurance inheritance has no tax obligations. Young people that have just started life are highly encouraged to go for the term insurance as it is more often than not temporary. Most of these term policies however can be easily turned into a permanent life policy in the future instead of taking a completely new policy and spending money and time that could be spent elsewhere. Check out http://en.wikipedia.org/wiki/Category:Types_of_insurance to understand more about life insurance.
Another common type of life policy is the whole life insurance. A whole life insurance policy will protect you until you reach 100 years of age. However, most of the insurance companies that are operational today are getting rid of these kinds of policies mainly because they are not very popular and also because they bring little profit to the insurance companies. Whole life insurance policy is also commonly referred to as permanent life insurance. This is because the holder will always be insured if he diligently pays his or her premiums. Know the Top Quote Life Insurance here!