An initial search of whole life insurance on today's leading search engines reveals a rather negative and incomplete picture of how this multi-faceted financial tool can actually work for the right client. The most common misrepresentation I've found outlined is the argument that you, me and the rest of the internet-savvy public are better off with a financial plan that supports the purchase of a cheaper level term policy while investing the difference in the stock market. The premise with this argument being that the long-term growth of your money is much better served in the stock market than placed within a permanent insurance policy. If something happens to you over that term (typically 30 years these days) your heirs or beneficiaries will have a greater monetary benefit than if they invested the same amount with a whole life policy.

Well, if you expect to compare a whole life insurance policy strictly by how its cash value growth measures up to that of blue chip equities or mutual funds, of course it will lose every time. I firmly agree that money invested in a well diversified portfolio of stocks and treasury bonds will provide a higher long term percentage of growth than the cash value portion of a whole life policy at 4% BUT that's not how a whole life policy is structured to generate wealth.

The key that Whole Life Insurance provides which the stock market cannot is a tax free benefit payment. No stock can provide this. Any gains made by a stockholder are going to face the dreaded capital gains tax before providing any sort of benefit to either yourself, your family, business, or charity.

The appealing benefit of a tax-free payment applies to both the prospective client only seeking a small $25,000.00 policy for his or her grandchild to the client with a net-worth of 7 million looking to shelter their estate from the federal estate tax and transfer his assets to his family members.

Although the government estate tax is moving steadily upward ($2,000,000.00 in 2006 to 2008 with a 'free pass' full repeal in 2010), its more than likely for many individuals in the future that their estate will exceed that government limit and, consequently, be faced with paying a hefty 46% estate tax bill to Uncle Sam.

How does one make sure their hard earned assets go where they want them to? They can use a whole life insurance policy.

By setting up a whole life insurance policy within the ownership of an irrevocable life insurance trust, you can shelter a great deal of your estate by paying into the policy each year and seeing it grow quite nicely into a tax-free benefit to your heirs instead of the government.

Furthermore, most whole life policies offer very important living benefits to the policy owner. The cash value generated within the policy that grows tax-deferred can be accessed as a loan that you choose to either pay back or not at all for any expense - education, mortgage, etc. If you do repay the loan, you'll much prefer paying yourself back the interest as opposed to another financial institution.

Some policies even provide access to nearly the entire death benefit when the policy owner is diagnosed with a terminal or chronic illness. They can use that accelerated benefit toward a trip with their spouse and family, for example. Not all whole life policies offer this so make sure to look carefully through any insurance carrier's available options.

Whole life insurance is a fantastic way to transfer assets and offer a gift to either a family member, school or charity. Its living benefits also provide options for the policy owner to spend more of their available finances toward retirement because their estate taxes will be taken care of. By all means, this is a product that exemplifies caring and love more than anything else and when used correctly, can provide a true measure of increased wealth.