Should I own multiple policies or just one big policy?

When should I purchase my next Life Insurance Policy?

Large Participating Whole Life Insurance policies are great tools to have working for you.

But only if the premiums are comfortable and affordable to you. Something else to keep in mind are the IRS rules which regulate how much money you can put into a policy and how much you can take out before it becomes a (Modified Endowment Contract) and you are taxed on the growth of the policy.

Sometimes Modified Endowment Contract policies will be proposed because of the cash value to premium ratio and while there are some cases when a Modified Endowment Contract policy makes sense, most of the time it’s better to fund each Participating Whole Life Insurance policy gradually at a rate that is comfortable and affordable for you.

Keep in mind, no two Participating Whole Life Insurance policies are the same, just as no two individuals are the same.

Each policy is issued based on your health, your income, your net worth and a host of other things that are entirely specific to you. Which is why underwriting is so important. Underwriting makes sure that you get the best rating and the highest possible coverage with the dollar you are spending for Participating Whole Life Insurance. And of course, we want that dollar to produce as much guaranteed cash values as possible because cash value is the Life Benefits of Participating Whole Life Insurance.

 

Suggested Resources:

Life Insurance Policy Loans to pay Premiums – Should You DO This?

Direct vs Non Direct Recognition Life Insurance

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