US Life Insurance Policy, USA Life Insurance Policies, Life Policy US

By: EconomyWatch   Date: 26 May 2010

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A US life insurance policy provides a financial cover to the family in the event of the policyholder’s death. The policy also provides security against the loss of your income, enabling your family to maintain their standard of living.

The popularity of USA life insurance policies has been growing. Life insurance companies witnessed 12% annual growth in total assets from 2002 to 2004. This compares with the 3% growth in assets recorded by the industry between 2000 and 2002.

US Life Insurance Policy: Reasons for Opting for Cash Value Insurance

While the primary purpose of a US life insurance policy is to protect your family against financial problems, it can also be used for personal planning. Life policies that offer this facility are whole life and universal life insurance. These policies include a cash component that continues to accumulate and can be liquidated when required. These cash value policies account for more than 70% of USA life insurance policies.


The reasons for opting for permanent life insurance are:

  1. Accumulation of cash value: With these policies, you can increase the cash value with each premium payment in a methodical manner. While a portion of the payment is saved for insurance protection, the rest is added to the cash value.
  2. Takes care of two components of financial planning: These policies help you not only to secure the future of your family but in asset accumulation. Coordinated planning can help you link a rise in the cash value with the death benefit such that the latter also rises.
  3. Guaranteed safety: These policies guarantee that your family or you receive insurance benefits and the cash value of the policy.
  4. Tax benefits: The cash value of this policy is exempt from taxes. You can even withdraw a specific sum from your policy without paying taxes. Only if your cash withdrawal is more than the premium paid would you be liable to pay taxes. Moreover, the insurance benefits paid to your family are not taxable.
  5. Goal-based savings: Such policies can be fine-tuned according to our varied goals. These financial goals could vary from buying a house to education for our children and retirement planning. These policies offer benefits corresponding to the policyholder’s priorities.


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