Whole Life Insurance: A Multipurpose Financial Planning Tool

Here’s how whole life insurance works, along with five key benefits (including savings and tax-efficient inheritance), as well as a few concerns to consider.

A multipurpose tool sits open on a rock in the sun.
(Image credit: Getty Images)

In my 25 years of providing financial advice, I have found whole life insurance to be one of the most important yet overlooked financial planning tools on the market.

From the guaranteed cash value to the income tax-free loans, the long-term care rider and long-term death benefit protection for my family, my whole life insurance policies have been an important part of my financial planning. Whole life insurance has many different uses. I often refer to it as the Swiss Army knife of financial planning. But before we get into the benefits of whole life, let's first review some background on how it works.

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Michael Aloi, CFP®
CFP®, Summit Financial, LLC

Michael Aloi is a CERTIFIED FINANCIAL PLANNER™ Practitioner and Accredited Wealth Management Advisor℠ with Summit Financial, LLC.  With 21 years of experience, Michael specializes in working with executives, professionals and retirees. Since he joined Summit Financial, LLC, Michael has built a process that emphasizes the integration of various facets of financial planning. Supported by a team of in-house estate and income tax specialists, Michael offers his clients coordinated solutions to scattered problems.