Time Is On Your Side

Youth Is Your Greatest Asset When Planning for Your Financial Future
If you're like a lot of young people today, you're not just thinking about your financial future — you're planning for it. And with good reason. With all the possible changes in the job market, the uncertain future of Social Security, and the ever-present factors of inflation and taxation, it's not hard to understand why so many people in their twenties and thirties have already begun to save for the future.

Often, young people with disposable income put their financial resources solely in the stock market, mutual funds, and other similar investments. But while you may be able to accumulate money quickly, you may just as easily (and as quickly) lose. Financial vehicles such as these involve risk — there are no guarantees.

Even when planning ahead, people in their twenties and thirties frequently overlook life insurance products. The fact is, if something were to happen to you, someone else might have to settle your bills, not to mention final expenses. And, as a young person starting out, your debts could be significant: student loans, credit card debts, car payments, even mortgages. If you've insured your car, your home, and many of your possessions, why wouldn't you want to insure your most valuable asset — you yourself?

Security for the Future, and More
Whole life insurance products provide a guaranteed death benefit that can help protect your family and your assets, and provide for the future through tax- deferred accumulation. Additionally, you can borrow against the cash value generated by your policy to help meet expenses throughout your future.¹

The Power of Tax Deferral
The cash values in life insurance and annuities accumulate tax-deferred. Although the main feature of whole life insurance is the death benefit protection it provides, it also offers the additional benefit of cash accumulation. Since the gain in a tax-deferred product isn't taxed until it's withdrawn, it usually accumulates at a faster rate. The chart shows the tremendous difference tax deferral can make in the rate at which your money grows.

Additionally, many permanent life insurance policies have loan and/or withdrawal¹ features that enable you to borrow or withdraw from the cash value to help cover expenses you may encounter during your lifetime. Down the road, this cash value could help you with the expenses involved with college tuition, a down payment on a home — even retirement. For these reasons, tax-deferred accumulation can provide a powerful financial edge.

Why Life Insurance Now?
It may cost you much less to purchase permanent life insurance now. The amount of money you pay in premiums for a whole life policy is set when you initially purchase your policy, and is based on your age and health status, as well as the level of risk associated with your occupation and hobbies.

By purchasing a whole life policy when you're young and healthy, you may be able to lock in premium rates that are much less expensive. Once set, those rates will never increase. Also, by purchasing permanent life insurance while you're young, you can allow a greater amount of time for your policy's cash value to accumulate.

Also, if your health or activities were to change greatly over the years, it would be potentially more expensive and/or difficult for you to obtain life insurance coverage. Since you'll probably need life insurance "sooner or later," why not get it sooner — when good health could assure you coverage, and your policy's cash value could have more time to accumulate tax-deferred?

The Difference a Few Years Can Make
With life insurance products, it's usually "pay now or pay later" — and if you pay later you may pay a lot more. For example, at age 25, $100,000 of whole life coverage for a non-smoking male costs around $732 per year in premiums. By age 35, that same coverage will be around $1,158 per year — not even taking into consideration premium increases due to changes in health status. But here's the clincher: even though that 35-year old male will pay a higher annual premium, he still won't have nearly as much cash value by the time he retires as he would have if he'd purchased the policy earlier. Waiting a few years now can end up costing thousands of dollars later.

What Are My Life Insurance Choices?
Life insurance policies come in many shapes and sizes. If you have an immediate insurance need and affordability is an issue — such as when you're starting a family — a term policy can meet your death benefit protection needs. But if you are looking for insurance coverage that also accumulates cash value tax-deferred, you may want to consider a "permanent" life insurance policy, such as whole life.

There's a wide range of whole life insurance products available for individuals and couples with various needs. For example, universal life policies can offer different levels of premium and benefit flexibility, while other policies can meet the needs of those with greater tolerances for risk. There are also blended policies combining term protection with whole life coverage, so you can get the coverage you need affordably while also beginning to accumulate cash value.

Policy Riders: Variety, Flexibility, and Added Protection
Think your long-term insurance needs will be different than they are today? Policy riders enable you to customize your policy, lock in guaranteed additional insurance coverage for down the road, or obtain other important benefits that help you meet your short- and long-term goals, often at little or even no cost to you.

Depending on the policy you choose, there are several riders available that provide a wide array of benefits. For example, there are riders to help you financially protect yourself in the event that you become disabled, unemployed, or terminally ill. Other riders can guarantee more insurance for you in the future — or even for your spouse or children — without having to provide additional proof of good health. There are even automatic riders, such as the Option to Purchase Paid-Up Additions rider, available at no additional cost. This rider offers you the chance to more quickly build cash value and increase your coverage through additional payments whenever you like.

With policy riders, you can create customized life insurance protection that gives you the flexibility to meet your changing needs, and will grow along with you and your family.

How About Annuities?
Annuities are long-term vehicles typically used for retirement funding. They're related to life insurance through similar tax-deferred accumulation and death benefit provisions.

However, while life insurance can financially protect against "dying too soon," annuities can financially protect against "living too long." In other words, annuities can offer you a stream of income for as long as you live. Like it does with permanent insurance, the money you place in a deferred annuity accumulates tax-deferred. Then, when you're 59 1/2 or older, you can elect to receive a lump- sum amount or a stream of payments that can last the rest of your life — providing you with financial security.

With flexible withdrawal provisions, annuities can help provide financial protection when you need it. (But remember that withdrawals are taxable and if made before the age of 59 1/2 may be subject to an additional 10% penalty.)

Like life insurance, a great advantage of purchasing a deferred annuity when you're younger is that you'll have more time for your annuity's value to grow. Also like with life insurance, there's a wide variety of annuities to choose from, offering flexible premium arrangements, different levels of growth potential, and a variety of payout arrangements. For these reasons, an annuity could be a perfect financial vehicle for you in planning for your retirement.

Why Wait? Contact Your New York Life Agent Today!
When planning for the future, there are many choices to make. Currently, you may be single or married, may or may not have children, could already own a home or be considering it in the future. But, whatever point you're at in your life — or plan to be at, someday — isn't it to your advantage to plan for those tomorrows, today?

1 Withdrawals and loans will reduce the policy's cash value and death benefit.

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