Life is filled with various risks, such as pandemics, health issues, job concerns, academic advancement, and financial insufficiency, among others. Money is an indispensable factor, but how can one save money and make it grow? Today, we can explore the advantages of the currently popular increasing term life insurance in the market.

1. What is increasing term life insurance? Increasing term life insurance is a life insurance policy where the coverage amount increases. It is based on the life of the insured, and as long as the insured is alive, the coverage amount will increase according to the agreed interest rate. The increase in coverage is reflected in the continuous growth of the cash value.

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2. What are the advantages and functions of increasing term life insurance?

- It locks in long-term returns that are equivalent to the life span. From the time the contract is established, the insurance company must pay the insured the protection benefits of the contract at the agreed interest rate, and this interest rate is locked for life. Currently, the preset interest rate for increasing term life insurance is 3.5% compound interest.

- It balances the flexibility of cash. Increasing term life insurance has a high cash value. In times of urgent need for money, one can flexibly withdraw cash through policy loans or partial withdrawals, obtaining a cash flow (80% of the cash value, and the interest rate is relatively lower than market loans).

- Pension preparation. Generally speaking, the human body's functions will gradually decline as age increases, and the ability to earn money will also gradually decline. The prepared increasing term life insurance can ensure a good pension for oneself.

- Education fund savings. Whether it is for a child's knowledge accumulation or the foundation of their future life path, the quality of education is an important factor. For parents, it is absolutely necessary to prepare an education fund for their children.

- Asset inheritance. Everyone will grow old one day, and when the time comes, the property you haven't used up will be left to whom? How will it be arranged? What will be the outcome? For example, if a person has two or more descendants and passes away suddenly without making any will, insurance beneficiary designation, or other forms to arrange the property, a bad consequence could be the breakdown of sibling relationships. There are many real-life cases, and everyone should be aware of them. If one can make some planning arrangements in advance, the outcome will be much clearer and simpler.

- Health insurance replacement. If the risk occurs in the early stage of the payment period, increasing term life insurance is difficult to replace. However, if it occurs after a period of payment, the compound interest of increasing term life insurance allows the money you put in to continue to appreciate, generating some emergency funds. For health insurance replacement, increasing term life insurance can solve future problems - specifically, how much it has increased, how much you can get at what age, and all of these are written into the contract, are certain, and will not change.

- Forced savings. If you want to save money, don't go out. Once you go out, you can't help but spend money, and there are places to spend money everywhere. Many people simply can't save money, and when they need it urgently, they have no money to use. Increasing term life insurance is a good tool for forced savings. In case of difficulties, there is still a sum of money saved.8. Legal Significance. Firstly, the increased life insurance is a private asset in wealth inheritance. By planning wealth inheritance through increased life insurance, the beneficiary does not need to go through a notarization of the right to inherit when receiving the insurance money, and does not require the consent of any other person. Secondly, the property rights and income rights of increased life insurance are separated. For example, if parents take out insurance for themselves and designate their children as the beneficiaries, when the children receive the death insurance money left by their parents, the death insurance money belongs to the children's personal property and is not shared with their spouses in law, which can effectively prevent the marriage risks of the children, and is not subject to the recovery of the parents' debts and exempt from personal income tax. Moreover, it can achieve the separation of corporate assets and personal assets, effectively avoiding the legal responsibilities brought by family joint liability and personal accounts receiving corporate business payments.

9. Resisting Partial Inflation. The best way to eliminate inflation is to spend money to buy actual consumer goods, rather than investing in real estate and so on. The current inflation rate is between 3.5-4, and the annualized rate of return (IRR) of most annuities and life insurance on the market is about 2.5%-3.5%. If inflation is greater than 3.5%, at least the interest rate of your insurance is determined, which also helps you resist most of the inflation. At least, the interest rate of the insurance remains unchanged from the moment it is determined.

III. Suitable Groups for Increased Life Insurance

1. People who plan ahead for themselves;

2. Parents who want to leave education funds, entrepreneurship funds, marriage funds, and prevent marriage risks for their children;

3. Entrepreneurs, separating individual and corporate accounts to avoid business risks;

4. Young people, forced savings;

5. People with poor health or older age: It is difficult for this group of people to purchase health insurance products, while the requirements for the insured's health condition and age are relatively relaxed for increased life insurance;

6. People with wealth inheritance needs.

Increased life insurance has functions such as wealth accumulation, inheritance, and forced savings, and is a very good guarantee. However, even if the functions of increased life insurance are good and it is currently popular, it cannot solve all problems, such as the functions of health insurance. So everyone should still make good money, manage their finances well, pay attention to their health, and enjoy life.