Whole Life Insurance As An Investment

Why in the world would anyone use whole life insurance as an investment?

Isn’t it supposed to be a terrible investment? In this article, you will learn why the rich use whole life all the time.

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If you’re like most people, you plan ahead to leave a financial legacy for your family. A whole life insurance policy is a versatile life insurance policy that does that and much more. In fact, the strength of a whole life insurance policy is its versatility and longevity—the most important features of any life insurance policy.

A whole life insurance policy is a policy that accumulates cash and can be used in a variety of ways at various life stages. In addition, it provides a guaranteed death benefit for your family. It’s a tax-efficient way of building your total net worth while retaining some flexibility of using your funds as needs arise.

If you have heard many times that whole life insurance is a bad investment, and you would like a more in-depth analysis, please check out: 7 Lies about Whole Life Insurance.

In addition, if you want to see what companies to pick for cash value growth, we have a great article: Top 7 Whole Life Insurance Companies For Cash Value

Access Cash Value Tax-Free 

The cash value of your whole life insurance policy accumulates on a tax-deferred basis. You have the flexibility to borrow from your own policy on a tax-free basis or take a cash surrender.

This is one of the main reasons why people use whole life insurance as an investment.

Your beneficiaries will also benefit from tax advantages. Beneficiaries will not have to pay taxes on the proceeds of your whole life insurance policy upon your death. That has real value for your loved ones. The benefits for a surviving family member, including social security, pensions, and annuities may be reduced after the death of the primary recipient.

A whole life insurance policy can make up the difference when other funds are reduced, by providing an income tax-free benefit to the surviving family member. Another important benefit is that the tax-free income is not available to creditors. 

Access Cash Value at Any Life Stage

As your life moves through various life stages, your financial needs change along with them. The versatility of a whole life insurance policy allows you to surrender accumulated cash value when you need it most.

At any time that you experience financial hardship such as lengthy unemployment, longstanding illness, or other financial hardship, your life insurance policy affords you the flexibility to withdraw or borrow against your existing cash value.

When you borrow against your policy, you can pay it back, so that your money continues to grow.

This is one of the reasons people use a whole life as a college saving: Whole Life Insurance For Kids

Receive Dividends

Your whole life insurance has a guaranteed rate, and with mutual companies, you will also receive dividends that will help your money grow. Dividend increase the death benefit and the total cash value throughout the years. They can be used to purchase paid-up additions (life insurance that doesn’t require any more premiums) inside of whole life insurance.

It’s a tax-efficient way to buy more life insurance without concern about medical underwriting. Of course, you can also just cash out the dividends, if you choose.

Here is a great article about dividends and life insurance.

Related: Whole Life Insurance Dividend History

Whole Life Insurance is Permanent Life Insurance 

Whole life insurance lasts your entire life, regardless of how long you live. It’s permanent life insurance that never expires. The cash value in your whole life insurance policy is guaranteed and does not decline along with the economic climate, so your beneficiaries are guaranteed to receive the face amount of the policy, no matter what.

While it’s true that term insurance can be purchased at a lower cost, at some point, the policy term will end, taking your death benefit with it. The term is likely to end at an age when you need it most. Remember that a whole life insurance policy provides lifetime security.

Whole Life Insurance As An InvestmentTry to think of purchasing a life insurance policy in the same way that you’d make any other purchase. When you make an important, major purchase such as a car or an appliance, you often favor the product with the best value for the money that you payout. Value is an important consideration when making life insurance decisions.

Leave A Legacy

The fact that you have permanent coverage gives you the ability to spend the rest of your assets. The whole life will guarantee that you leave a legacy to your beneficiaries, no matter what.

If you want to understand how whole life insurance can play an important part in your investment portfolio please see Tom Hegna’s video. Tom is a speaker that specializes in retirement income, check out: 3 Reasons to Buy Life Insurance


Investing in a whole life insurance policy as part of your comprehensive investment portfolio is a good investment strategy. Other types of investments may be less secure as they fluctuate with financial market trends.

A whole life insurance policy will enhance your existing investments to help provide a comfortable retirement when the time comes, in addition to the other benefits it provides.

Your most valuable asset is that you are the financial provider for your family. A whole life insurance policy protects the value that you bring to your family.

Regardless of how life unfolds, you’ll want to continue protecting them by purchasing the right life insurance policy in the right amount.


A whole life insurance policy covers all of your financial bases. It’s a guaranteed fund that helps now, later, or just when you need it. Purchasing a whole life insurance policy is tax-efficient, versatile, guaranteed, and permanent. A whole life insurance policy offers you peace of mind for your whole life and for the lives of those you leave behind. 

Final Word

There are simple reasons why whole life insurance can be a good investment. Don’t overthink it, if you want something safer, without market risk and that you control then you should consider it.

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