5 Reasons Why a Dividend-Paying Whole Life Policy is Better Than Your Savings Account

July 28th, 2014 → 4:19 pm @ MacDev Financial Group| Stephen Devlin // No Comments

Sure, you can “be your own banker” with just a savings account, an automatic payment plan, and a lot of willpower and save thousands upon thousands of dollars to use however you please. Yes, you can create a budget for your monthly expenses, give yourself an auto-payment that’s just enough to cover them, and shuffle the rest of your monthly earnings into an account that makes 1 percent interest – and you might be able to pay in cash for a car every few years (just when the old car breaks down). But unless you start very young, and enjoy a high-paying job out of college, funding home ownership or your retirement his way is a very good trick.

Here’s why investing that money in a dividend-paying whole life policy is smarter than stuffing it in savings.

1. At an interest rate of 1 percent, your savings account isn’t saving you anything – it can’t even keep up with the average rate of inflation. In 20 years, even if you haven’t touched a dime, you’ll have less buying power with your saved money than you do the day you put it in.
2. Dividend-paying policies are designed to grow your money to keep pace with, and outpace, inflation. You share in the gains, with no risk of damage from market losses. They even come with a guaranteed minimum growth rate.
3. Your dividend-paying whole life policy is tax-sheltered, which means you don’t pay taxes on gains and dividends each year, and taking money out is also tax free (it’s a loan you take from yourself!).
4. If you go bankrupt, no one can access the money in your whole life policy. Not probate, not creditors – it’s yours.
5. Use it to pay off large expenses with cash while you’re alive and still have money left to leave to your heirs when you’re gone – no savings account offers that!

These policies have worked as safer money strategies for thousands of people. Ask us how they can work for you!

Tags: CPA, Financial Advice, retirement advice, retirement information, Tax Advice, Tax Information, Tax Tips