Why Should a Young Professional Consider Whole Life? 4 Reasons.

Young Professionals

1. Cash Flow


Issue/Concern: Starting a family often strains cash flow. The addition of children tend to be more expensive than anticipated. Kids combined with outstanding school loans, car payment(s), and a mortgage are challenges facing many of today's young professionals.

Whole Life Insurance as a Strategy: Too often, young professional families choose term over permanent life insurance based purely on cash flow issues. However, as kids grow, so do their appetites, so do their clothes, usage of utilities, space in the home, etc.. Income increases seem to rarely keep up with real cost of living increases. Whole life insurance provides a cost effective strategy to build a foundation of not just a life insurance program, but a financial plan. Cash values are not subject to stock market risk, the death benefit is guaranteed by the claims paying ability of the insurance company, and the costs are predictable.


2. College Savings


Issue/Concern: Because of compounding, the sooner you get started, the better. The question is, where to save and what to invest into. What happens if your child receives financial assistance, grants or a scholarship? Will the funds be available without penalty? What accounts have tax benefits and/or tax penalties?

Whole Life Insurance as a Strategy: Whole life insurance provides a flexible, tax advantages option for saving for college. With both variable and fixed whole life policies, you have the ability to match your risk profile. Cash accumulation is tax deferred and can be structured so the distributions (withdrawals & loans**) can be tax free. Because it's life insurance, the funds can be used for whatever, whenever. There are no restrictions on when or why you withdraw funds. Finally, don't forget about the protection element of the death benefit. The contract can survive beyond college and be the foundation for future planning.


3. Getting Started


Issue/Concern: What do I do first? Pay of loans, invest into my 401(k) at work, buy a house, lease a car, build up bank savings accounts? Getting started on the right path to a secure retirement involves many choices. What do you do first, next and continue with?

Whole Life Insurance as a Strategy: Ask most people with wisdom and 'life experience' and they're likely to tell you that if that had to do it all over again, they'd 'bite the bullet' and secure whole life insurance as young as possible. In a volatile world, whole life insurance is guaranteed by the insurance company, generally avoids stock market risk, and most importantly protect you and your family.


4. Special Needs Child


Issue/Concern: The challenges of having a special needs child are like no other. Often, children with various birth defects, degenerative diseases and such, will never be completely independent.

Whole Life Insurance as a Strategy: Trusts to protect handicapped or special needs children should be funded to provide income forever, whenever. Whole life insurance provides a guaranteed death benefit. In addition, the guaranteed and non-guaranteed cash values can be used when earned income from the parents diminishes.

This publication is offered for the purposes of education and information only and should not be considered tax or legal advice. For more information on your specific situation, please consult your legal or tax advisor. Neither Guardian, nor its subsidiaries, agents, or employees provide tax or legal advice.
**Policy benefits are reduced by a loan, loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above what is paid into the policy may cause ordinary income taxes to be paid on the gain portion of the policy. If the policy lapses, any withdrawals or loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), any loan and any distribution is considered a withdrawal. These withdrawals are distributed as gain first and subject to ordinary income taxes. If the insured is under 59 1/2 the gain portion of the withdrawal is subject to a 10% tax penalty.