5 ways life insurance can protect and grow your wealth

Life insurance is often associated with providing financial security for your loved ones in the event of your passing, but that’s not all it does. Because while it is indeed one of its primary purposes, life insurance can also serve as a valuable tool for protecting and growing your wealth during your lifetime.

Here are five ways life insurance can play a dual role in helping you secure your financial future while alive and ensuring your legacy for your beneficiaries.

1. Income replacement

One of the most critical aspects of wealth preservation is ensuring your loved ones have a reliable source of income after you're gone. Life insurance can provide a tax-free death benefit to your beneficiaries, helping them maintain their standard of living and meet financial obligations. By doing so, it safeguards the wealth you've accumulated over the years, preventing it from being depleted to cover immediate expenses or debts.

Life insurance policies like FWD Set for Tomorrow have that can help cover immediate financial needs while the benefit amount can be used for income replacement so your beneficiaries can maintain their lifestyle. And should you be unable to pay your premium due to any of the 42 listed critical illnesses or should you incur total and permanent disability, FWD will pay for your future premiums, so you don’t lose your benefits.

2. Estate tax planning

Wealthy individuals often face substantial estate taxes upon their passing, which can erode a significant portion of their assets. Life insurance can be used strategically to cover these estate taxes, allowing your heirs to inherit your wealth without the burden of heavy tax liabilities. Set for Tomorrow – Estate Protector will help you with exactly that as this plan is guaranteed to provide you with lifetime protection up until age 120 while helping you to protect your estate or transfer your wealth with a sizeable life insurance cash benefit to ensure that you pass on your legacy without burdening your family with inheritance tax.

3. Retirement income

Certain life insurance policies, such as These policies combine life insurance with an investment component, allowing policyholders to build their investment portfolio within the policy.

One such policy is FWD Manifest, which gives you life protection and coverage while growing your wealth by letting you invest money even with minimum market knowledge. And to help you grow your wealth faster, you will receive a start-up bonus, a loyalty bonus, a premium extension bonus and Lastly, you will also receive an investment protector bonus which is a benefit that cushions your investments from market volatility.

4. Wealth transfer

Life insurance can serve as an efficient and tax-advantaged wealth transfer tool. By naming your heirs or a trust as beneficiaries of your policy, you ensure that a lump sum is distributed to them upon your passing. This can help you pass on your wealth seamlessly and minimize the financial strain on your loved ones during a challenging time. FWD All Set Higher or Set for Tomorrow – Estate Protector can provide your family with the lump sum coming from the death benefit or account value to cover for estate taxes.

5. Supplemental retirement savings

Life insurance policies with investment component can act as a supplemental retirement savings vehicle. As your investments grow over time, you can access it tax-free, creating a financial safety net for your retirement years. You can start with FWD Manifest which gives you access to investment opportunities so you can build your retirement fund over time. Effectively making your money work for you without the need to manage it.

Add life insurance to your financial strategy!

While life insurance is commonly seen as a means of providing for your beneficiaries after your passing, it offers a broader range of benefits that can protect and grow your wealth during your lifetime. By carefully selecting the right life insurance policies and incorporating them into your financial strategy, you can secure your financial future, enhance your retirement planning, and ensure a smooth wealth transfer to the next generation.

Consulting with a financial advisor  can help you tailor a life insurance strategy that aligns with your unique financial goals and helps you maximize the potential benefits of these policies. Life insurance is a versatile tool that can both protect and grow your wealth, enhancing your financial well-being and the legacy you leave behind.

Talk to an FWD financial advisor today.