Life insurance by itself isn’t typically categorized as a financial asset, but in some cases, it qualifies. Right Choice Insurance and Taxes serving Tuscon, AZ wants you to understand when life insurance adds a financial asset to your portfolio.
The term asset class refers to a purchase you made today that you anticipate will have greater value in the future. Assets should appreciate over time, but some could depreciate.
Term life insurance can qualify as a financial asset when it has a cash surrender value. Whole life insurance can qualify as a financial asset when it has a cash value account attached. The latter can be either a savings, money market or investment account.
Both of these types of life insurance guarantee a future value for the policy while you live. If you can only use the policies for your beneficiary, then you could argue it qualifies as their financial asset, but financial planners and insurance agents do not really look at it that way.
You can only consider a life insurance policy with a surrender value or a cash value as a financial asset. A financial asset contributes to your financial portfolio, which, in turn, adds to your net worth.
Adding to your net worth helps you overall in finance and in life. You can more easily obtain loans and credit cards when you have better credit and a higher net worth.
Consult with the insurance agents at Right Choice Insurance and Taxes serving Tuscon, AZ to learn which life insurance product can help you the most and which qualifies as a financial asset. Call us today.