YOU DON’T “INVEST IN LIFE INSURANCE

I’m always asked “I hear life insurance is a terrible investment, why would I ever want to invest my money in such a thing”. My answer ? Life insurance is not an investment, but rather what I call “savings with great benefits” or “savings on steroids”.

Let me explain. First we are talking about Permanent or Whole Life Products and not Term Life Insurance. Term Insurance is like “renting” insurance for a specific period of time and has no cash value.

Investing vs. Saving

The difference between investing and saving is that with investing there is no guarantee you will not lose your money, including your principal. If anyone tells you any different- run, don’t walk away.

➔   You invest in Real Estate-you can lose your money.

➔   You invest in mutual funds- you can lose your money.

➔   You invest in gold- you can lose your money

➔   You invest in a business- you can lose your money

➔   You invest in stocks or bonds- you can lose your money

➔   You invest in crypto- you will lose your money

Potential returns from “investing” can be far greater than saving instruments, but there is ALWAYS RISK. There was one investment that never lost money over a nine (9) year period and posted returns in excess of 1% per month- amazing! Only problem was it was run by Bernie Madoff…..

“Savings” on the other hand are associated with safety- no risk of losing money. You may not realize the returns of investing, but your money is SAFE. Savings Instruments include:

➔   Savings Accounts.

➔   Certificate of Deposit (CD’s)

➔   Treasury Bills

➔   Government Bonds

➔   Money Market Funds

➔   Life Insurance

So why do I call life insurance “savings with benefits or savings on steroids”? Because LIfe Insurance enjoys many advantages over the above aforementioned instruments along with all the aspects of safety.

➔   Guaranteed NOT to lose your principal or earned interest

➔   Guaranteed death benefit from day one.

➔   Market returns that could dwarf returns offered by a savings plan.

➔   Guaranteed returns that usually are higher than savings or CD’s.

➔   Liquidity not available with CD’s, Treasury Bills, 401K or IRAs.

➔   Unique tax advantages no other savings instrument can touch.

All this an average net rate of return ranging from 4-6% in the long run!  Almost as good as Mr. Madoff without having to worry about going to jail.

Does Life Insurance replace investing in securities or real estate? No, it compliments such investments.  Smart people save and invest.

Give me a call and will chat about the details and how life insurance can fit into your portfolio quite nicely. You may find yourself laughing all the way to the bank…..