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Michigan Whole Life Insurance - Safety, Regulations and Benefits
Been a rough year? You're not alone. For many Michiganders, the past eighteen months have been a rocky economic landscape at best. If you've survived the upheaval, you're probably asking yourself, "What should I do now to keep my money safe?"
You should be considering whole life insurance. A whole life insurance policy does more than provide for your family in the event of your death. You can also structure your whole life policy as an investment tool - one where you can grow tax-free cash values and provide a source for personal cash loans.
Knowing Your Investment Dollars are Safe
Life insurance companies enjoy a better reputation for financial stability than do banks or other financial institutions. Whole life policies are invested in very safe investment vehicles like bonds. Risk is reduced even further by diversifying bond investments over industry, geography and maturity.
Also, life insurance money managers are interested in the long term success of their clients, not short term, immediate gains. Their structured approach to investments help keep your costs and risks low. It might not be the flashiest of investment vehicles, but if you're looking for a conservative, reliable place to grow your money, whole life insurance policies are what you're looking for.
Policyholders of Whole Life Insurance in Michigan can also rest easy knowing that their policies are protected by state regulators, a proven tactic for protecting your interests over corporations.
Michigan Whole Life Insurance Protections
Michigan policyholders can rest assured that life insurance companies and their products are regulated by state insurance offices, ensuring consumer protection over corporate or industry interests.
Michigan policies are also protected by state mandated reserve pools. Life insurance companies are not allowed to fail, that is, they can't file for bankruptcy like other businesses can. If for any reason your insurance company can't honor the terms of your policy, other life insurance companies operating within the state of Michigan will be assessed the money to help honor your claims. There are limits to these guarantees, however.
The Michigan Guaranty Association guarantees (as of December 2009) whole life insurance policy protection up to $300,000 in death benefit per insured life. Cash values up to $100,000 per insured life are also protected.
Michigan whole life insurance assets are also protected in the event a policyholder must file personal bankruptcy. Michigan law (as of December 2009) provides for virtually unlimited asset protection from creditors in regard to whole life insurance policies.
Benefiting from a 100% Reserve Base
As a whole life policyholder, you have access to the cash values within your policy for withdrawals and personal loans. These loans are secured by 100% reserves. This means that every dollar you borrow from your policy is backed by a dollar held in reserve. This one to one ratio prevents inflation and provides the stable financial structure life insurance policyholders depend on.
Banks on the other hand, practice what is known as fractional lending. Money is often figurative, meaning a bank can lend $10 for every $1 it holds in reserve. When the economy falters, this philosophy of lending can lead to great instability and even collapse. This is why banks fail, and whole life insurance companies can survive even the greatest of financial catastrophes. In fact, during the Great Depression, the cash values within whole life policies remained 99.9% safe, while over 10,000 banks failed.
Added Benefits of Dividend Paying Whole Life
But buying a whole life insurance policy doesn't mean your money will be tied up where you can't get it when needed. All whole life policies allow you to withdraw from your cash reserve, tax-free up to your basis, or the amount of money you have contributed to the policy.
Some whole life policies, including Dividend Paying Whole Life Insurance, can be structured to allow for self lending from your cash reserves. This is a financial practice known as Infinite Banking. Essentially, policyholders become their own bank.
There is great financial value in being able to provide loans to yourself. By becoming your own bank, you'll be able to set the terms of your loans without all the paperwork. As long as you have the discipline to repay yourself on a structured payment schedule, with interest, you'll be the banker you always dreamed of. You can loan money to yourself, pay yourself back on your own schedule, set your own interest rates, and make money for yourself in the process.
You cut out the middle man (the bank or lending institution), cut out the paperwork, and by structuring the personal loan through your dividend paying whole life policy, you can cut out the taxes as well. Money from your cash reserve can be loaned to yourself tax-free. Cash reserves accumulate tax-free within your policy, including the interest you pay on your personal loans. Some policies will even continue to pay interest on your entire cash reserve, even if some of the money has been withdrawn for personal use.
A Proven Product
Just because the economy is going through a rough spell, doesn't mean you can't invest your money with confidence. Whole life insurance is a proven financial product, and Michigan consumers can feel safe purchasing these products knowing they have a history of secure, reliable performance even during economic turmoil.
Author Resource:-
Scott Storace is a financial expert that teaches the Infinite Banking concept utilizing whole life insurance. This concept creates financial wealth by creating your own personal bank. Get your free Infinite Banking report for more information on the concept.
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