5 Strategies to Use Whole Life Insurance to Build Wealth
Life is very unpredictable. It is full of surprises. Unfortunately, some may be unpleasant. When you are young and fit, you may feel invincible. But it is wise to be prepared to fight against any obstacle being thrown at you. This is where life insurance comes in. Let’s have a look at how you can use a whole life insurance policy in Singapore to build wealth.
Building wealth with whole life insurance
Investing in a whole life insurance policy is a great way to build wealth conveniently. It is essentially an investment for a better life and a very good one at that! But this requires a clear objective and proper planning. Here are five strategies that you can use to build wealth:
1. Start saving
In contrast to other life insurance policies, when you purchase a whole life insurance policy, you are creating a cash value along with the death benefit (the payout given to the beneficiary when the insured dies). Whole life insurance policies in Singapore are protected from bankruptcy. Therefore, the accumulated cash value is yours to keep! However, you need to save and increase your financial resources to start investing.
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2. Select the best whole life insurance policy
How do I find the best whole life insurance in Singapore? Do I need to pay a high premium to maximise my benefits? Understandably, such questions will cross your mind when deciding on which whole life insurance policy suits you best.
Before selecting a policy, you need to consider the following points:
- Claim ratio: It refers to the proportion of claims costs incurred with regard to the premiums earned; it is wise to get a policy with a higher claim ratio.
- Reputation: Find trustworthy companies by performing a background check.
- Assess the cost: Make sure to check the premium and total cost of your insurance.
Whole life insurance policies in Singapore are in force until your death or until you decide to cash it out. Therefore, once a premium has been allocated to you, you will be able to take life-long advantage of the same low rate.
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Usually, whole life insurance policies in Singapore come with an investment component known as endowment and investment-linked plans (ILP). Endowment policies are designed for individuals who are interested in wealth accumulation and educational planning. There is a guaranteed cash payout upon maturity. Unlike endowment plans, an ILP plan does not guarantee a payout.
3. Include riders
Riders can be used as an additional financial safety net to help with coverage for emergency purposes.
4. Regular review
Make sure to assess your investments periodically. This is important because you need to ensure that your investments are in line with your expectations. Regular reviews will give you enough time to accommodate any changes needed.
5. Prepare a retirement plan
Whole life insurance can be used to supplement your retirement plan. However, using it as your only source of retirement income is usually not recommended. Since whole life insurance generates guaranteed cash value, it is better to use it for wealth accumulation.
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With the assistance of whole life insurance, money can be preserved within the family and shielded from taxes. The investing component and cash value are great ways to save money tax-free if you frequently max out your retirement accounts. Due to these aspects, you can borrow from your policy to get cash. You also have the opportunity to earn interest from the death benefit and cash value.
Get the best whole life insurance policy in Singapore
Insurance Empire has a highly dedicated and professional team to help you with all your insurance needs. Select the best whole life insurance policy in Singapore with Insurance Empire and save money for a better future. Get help with identifying the best options to ensure your loved ones are well looked after.
If you have any questions or concerns, don’t hesitate to get in touch with Insurance Empire today!