Participatory Whole Life and Options

Participatory Whole Life and Options


In this segment of Finding the Need, Financial Advice Founded in Faith, we’re going to talk about [participatory whole] life insurance and options as an asset. There are many people out there that say, “No, life insurance isn’t an asset.” I’m here to tell you that it is. It can be. And so for those naysayers that say, buy term and invest the rest, that’s good, if you have somebody that is really going to be looking out for your assets. But what happens when the market does what the market can do and frequently does? It adjusts. 


Life Insurance in the Marketplace

One thing about a product that is based upon a life insurance chassis for an asset is that it makes money every day. It’s usually impervious to what’s going on in the world. It will make money all the time. Of course, it’s going to be based upon the financial strength of the company you’re doing business with. But let’s face it, life insurance companies have been around for hundreds of years. They’ve been around longer than some banks, and they have proven track records, far better than most banks do. And so, their assets are usually pretty stout. 


Why Life Insurance is an Asset

So why would you consider life insurance as an asset? Well, assets are what are going to make our lives better. In order to have assets, you need to take a look at your life, based upon what are you buying? What are you putting your hard earned income in? Well, you’re going to have term. Basically, everybody does. But you’re going to need to also offset that with something that’s going to grow. 


Participatory Whole Life as an Asset

And there’s nothing that grows better, in my opinion than a whole participating, whole life policy. So, again, I’m going to repeat myself. In my opinion, nothing grows better than a participatory whole life policy. It’s a policy that is budget-driven. You pay a specific price for it, a price that you know that you can afford and you worked out with your advisor. And then it’s going to grow, because it’s participating. So it’ll grow for you, and it’ll continue to work the way you want it to work. And you can go in and out of that policy, and use the money, borrow against it, if you will, and do with it what you want, pay it back. And in most cases, these are tax favorable. So they’re going to be used without you having to have to worry about paying taxes on the growth during the time that you’re growing. Some of them, you will have to, but most of them you will not have to. 

Capabilities of a Participatory Whole Life Policy

Now that you have decided that you want to have an asset-based life insurance policy, and it’s probably going to be a participatory whole life policy and options, what do you think you can do with that? Well if you’re a young couple, you could use that to help offset higher education costs, college education costs. You might be able to use that to pay for your private schooling for the children, you will be able to use it, in some cases, depending on the product that you’re purchasing, for longterm care costs, assisted living costs, in-home care costs. There’s all kinds of variables that that could be used for that.

Participatory Whole Life Policy in Business

You can also use it down the road to purchase assets. If you’re a business, you can use it to purchase leasehold improvements, equipment. We know of a guy who owns a construction company that used it to buy heavy equipment. And then he pays himself back. And at the end of the day, you can also use it as a pension offset. You’ve been building these products for years. They’ve been doing what they’re supposed to do. 

Unexpected Benefits

And now, you don’t need as much insurance as you thought because your other assets have also helped you, you could turn this into a pension check if you want by annuitizing the money. There are a lot of different ways for you to use the funds within those policies, and it’s just up to you on how you want to use it. The cool part is you have options, and it’s always good to have options.

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Watch This Series from the Beginning

Check out the first video in this series, "Introduction: Finding the Need" with host Bob Abbate. In this introduction, Bob will guide viewers on how to protect one's family, assets, investments, and also one's business. He will do this in a Catholic-centric way and in a way that is centered around the three Fs: faith, family, and finances.