Photo: Alex Iby on Unsplash
Invest? With Insurance? Yup.
Actually, it’s one of the best ways to invest for those dream purchases, and when you’re ready, the Gift of Life policy allows you to use the cash accumulation to be distributed tax free. And that’s just one way this life insurance investment can pay off; there are many different ways—including allowing you to buy a car.
You can set up a plan to benefit anyone you have an insurable interest with–yourself, your spouse, your business partner or your kids. True Path, a partner of the National Life Group, is a financial firm dedicated to everything from insurance to tax strategies, and its Gift of Life plan is perfect for anyone with a family who wants to start saving now for their dream car — or college, home downpayment or other big ticket item.
This story is part of a program associated with TruePath Financial, which offers life insurance, cash value life insurance and financial planning. A Girls Guide to Cars may receive a commission from links in this article but in no way does that sway our advice or opinion.
Because it’s not just an investment but also, an insurance policy, your family will be set in the event of injury, accident, illness or disability. Put a bit in every month, let it grow and when your child has earned the honor of having her own car, the money will be there to use, as a loan or a withdrawal. If something unexpected occurs, it pays out as an insurance policy would. Win, win.
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The Gift of Life Insurance Plan
Unlike many investment accounts that are linked to the stock market, Gift of Life is structured to ensure the money will be there when you need it— it has a ‘zero floor’ which means that if the stock market dips, your policy won’t lose value. It may not grow during a downswing but the cash value of your policy remains. Many investments can’t make that statement. True Path’s Gift of Life insurance plan is a cash value life insurance policy, which means that the policy lasts for as long as the insured person is alive. However, one of the benefits of a cash value life insurance policy is the fact that, in addition to paying out after the insured person’s death, accrues a cash value savings component that can be drawn upon as a loan or withdrawn during the insured person’s lifetime.
The cash value aspect is the investment portion of Gift of Life. You can access this money while you’re still alive—and the Gift of Life plan also enables your child or grandchild to access that money when they reach a certain age and those withdrawals are tax free (check with your tax professional for specifics).
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There are also tons of benefits to the Gift of Life insurance plan, specifically:
- It locks in insurability ratings for the child or insured person, so insurance rates won’t go up if they’re later diagnosed with an illness or get in an accident
- Even if the stock market crashes, with the zero floor this policy will not be impacted
- There are no withdrawal penalties for taking out cash than has accumulated in the policy and it can be taken out as a loan or withdrawal
- If cash is taken out as a loan, the full value of the policy continues to grow; the amount borrowed is simply subject to interest until it’s repaid and the interest rate is typically less than the growth rate
- That money can be used by your child for anything: buying a home, going to college, getting married, or even buying their first car
- You can also use this money for yourself, including purchasing your dream car
- When the child listed in the Gift of Life plan becomes an adult, ownership of the policy can be transferred to them. They can also purchase their own policy after turning 18
- The policy can be designed however you prefer. For example, you can decide that the policy will be rich in cash payout but low in death benefit, depending on your circumstances and needs
- And, you can start a plan with a low premium and add to it over time; plans start as low as $50 a month
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How to use the Gift for Life insurance plan to buy your dream car
While the Gift of Life insurance plan is intended to benefit your children or grandchildren, you can still use it strategically in order to save up for the luxuries in life—like that dream car that’s always been a little outside your price range.
So, reverse your thinking: You can invest the savings earmarked for your kids in a Gift of Life plan, then whey you’re ready, feel guilt free shopping for your dream car. You’ll have the confidence that your child is guaranteed funds when they turn 18, and if you can convince them to wait, they’ll have even more. Either way, you’ll have the peace of mind knowing that you’ll be free to take care of both your family and yourself.
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But that’s just one example. Your own personal policy may be different depending on the plan you’ve selected, the age of your child, how much you want to pay in, and how much you’ll need to afford that dream car.
To find out more, and if you decide to purchase a Gift of Life policy, use our affiliate code TRUEPATHGGTC to begin designing your ideal plan.
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