Learn how getting life insurance can be a type of asset management.
March is Asset Management Awareness Month. While this month is normally geared towards encouraging businesses to manage their assets, you should also take this opportunity to look at your personal assets. One way to celebrate this month is by looking at your life insurance as an asset. Here’s what you need to know about treating your policy as a personal financial asset.
What Is An Asset?
In simplified terms, an asset is something that you buy now with the expectation that is will have some value in the future. Common types of assets include shares in a stock or real estate purchases such as a home.
How Does Life Insurance Fit In?
While most people probably do not think about their life insurance as an asset, it technically is under certain circumstances. Similar to other types of assets, life insurance offers a payout if a certain event occurs. The main difference between life insurance and more traditional assets is that the size and timing of the payout is quite different.
Your Life Insurance as an Asset
Ultimately, your circumstances and the type of policy that you have determine whether or not your life insurance is an asset. For instance, term life insurance policies aren’t considered assets by most financial institutions. This is because term policies are temporary and therefore do not have a guaranteed return. However, whole life policies are treated like an asset because they have a guaranteed payout. So long as you continue to pay your premiums, then your beneficiaries will receive compensation when you pass. Because this payout is normally quite substantial, most financial institutions consider these policies as assets.
Interested in learning more about the financial benefits associated with having a life insurance policy? Then don’t hesitate to contact the professionals at Unisource Insurance Associates in Wauwatosa, Wisconsin. Our experienced team is ready to assist you with all your insurance needs.