The recent developments in investment markets, the volatile performance of equities and the low interest rate in fixed income investments have brought about a new appeal to an old workhorse.

For investors looking for a diversification in their investment portfolio and a more tax efficient fixed income investment alternative, a compelling argument can be made for the use of Whole Life Insurance.

Why is Whole Life Insurance a good investment?

• The tax advantaged steady growth, combined with significant estate benefits are the primary reasons why Participating Whole Life is now being thought of as a good investment class to be part of your investment portfolio.

• Unlike other accumulation policies such as most universal life policies, mutual funds and other equity investments, the cash and dividend value of a whole life policy cannot decrease as long as premium payments are made or have been paid up.

Who should consider Whole Life Insurance as an investment class?

• Anyone looking for stable returns in their investment portfolio

• For those that have corporations and are accumulating surplus funds, the use of whole life insurance in the corporation, not only provides stable, tax free returns but also provides opportunities for Capital Dividend Account planning.

What is Whole Life Insurance?

• It is permanent life insurance protection – meaning it won’t expire before you do!

• It has level guaranteed premiums for the life of the policy. (Shorter premium paying periods are often available)

• It has tax advantaged cash value growth.

• It pays annual dividends (participating whole life).

• The cash value and the dividend account grows tax free, at death it is paid to the beneficiary tax-free.

Can I access the cash value of the policy?

• During the lifetime of the insured, the cash values can be accessed by way of partial or total surrender, or by policy loan.

• Income tax may be payable on withdrawals. However, one alternative to avoid paying income tax is to use the policy as collateral and borrow from a third party lender. And if structured properly, the interest on the loan may be tax deductible.

Favorably compares to a long term, high yield bond.

• Today many portfolio managers recommend that a prudent investor have a diversified portfolio with a portion in fixed income investments, such as bonds, term deposits, etc.

Including participating whole life in your portfolio can produce some significant results, and reduce overall volatility.

Whether investing as an individual or via a corporation, the significant results that can be achieved by using Participating Whole Life are worth investigating.

Feel free to contact me for more information if you think you can benefit from this strategy or use the social sharing buttons below to share this article with a friend or family member you think might find this information of value.