Poorly Understood,
Life Insurance Deserves A Place In Your Portfolio
Discover The Unique Strengths Of Life Insurance
While we pay insurance for many things that may never be required, life insurance seems to be the most disliked. Unlike other kinds of insurance, the insured will never see a monetary benefit (in term life), so the main benefit for the insured is peace of mind.
Most people, especially encouraged by a variety of financial gurus, opt for term insurance, also called “temporary” insurance.
Yet we believe that permanent, or “cash value” life insurance has a vital place in wealth planning for anyone who has any amount of wealth.
Since both advisors and the public at large have misunderstandings about life insurance, we have prepared this page so that you may become more familiar with the various forms of life insurance policies. Then, as you put together plans for wealth building, you can select and benefit from the most appropriate type of policy.
We have found that life insurance, in the correct circumstances and when combined with other tools, can be an outstanding investment tool. What gives life insurance such a wonderful quality? The same thing that gives Roth IRAs their magic — the money grows tax free, and comes out potentially tax free.
We’ve prepared pamphlets (below) on the various types of insurance policies, what they are, how they are used, their pros and cons. We encourage you to read each of the pamphlets below, which you can do by simply clicking on the link.
Term Life Insurance
There are two primary types of term (or temporary) life insurance: straight term life insurance, and “Return of Premium” Term Life Insurance. You can read about each by clicking on the appropriate link below:
Permanent Life Insurance
Permanent life insurance has a number of specific concepts unique to it. You may be familiar with some or all of the terms, but we encourage you to review the basic permanent life insurance concepts by clicking here.
Done getting familiar with the terms? Okay, let’s get started on the types of permanent life insurance by clicking on the links below:
Reading the material above, you’ve no doubt discovered that another term for permanent life insurance is “cash value” life insurance, because the policies have a cash value that can be used by the insured — not just a benefit that pays off at death.
This cash value, when used for a wealth building strategy, can be used effectively for retirement income. Thus, the permanent life insurance provides multiple benefits — not just a death benefit for protecting the family, but also the possibility of using it for retirement. In addition, the versatility of these tools can add flexibility in handling a variety of financial wrinkles rather than just becoming “money down the drain.”
Even if you can not yet afford the premiums for permanent life insurance, a situation faced by many of our younger clients, we encourage you to take advantage of the term life insurance policies that you can afford.
But we know that many clients who can afford the premiums have difficulty in seeing the value of permanent life insurance. We recommend the “return of premium” term life insurance policies for them.
We’ve found that equity-indexed life insurance policies provide the best overall value for clients who wish to have minimum guarantees on the cash value in their policies. These policies have upside potential and a growth rate pegged to the S&P 500 index. This type of policy provides both security and reach for good growth.
Some types of equity-indexed policies also have a free long-term care insurance rider, and one in particular has its growth pegged to 140% of what the S&P 500 returns.
Our clients have been able to find life insurance policies that work well for them. We’d like to do the same for you. We welcome your call to discuss various types of life insurance and how they fit into an overall plan of wealth building, with no obligation to you. Just click here to contact us. We look forward to your call.
Don’t forget to check to see if your state laws automatically asset protect life insurance policies and annuities.
