Broker Check

Life Insurance

A Life Insurance policy is possibly the most misunderstood, yet one of the most versatile financial tools we have available to us…

Why Life Insurance?

Protection against an unexpected early death is one of the best reasons to obtain life insurance, but not the only reason. Unlike Qualified Plans, Life Insurance can provide the much needed leverage essential to the completion of any truly viable retirement strategy. However, the death benefit is just one of the many benefits available from of a life insurance policy.

Let’s forget about what it’s CALLED…

…in our experience, once you know what life insurance DOES, you will want as much as you can afford.

Some of the potential benefits available to policy holders under current law:

  • Accessibility & Liquidity - No IRS penalty before turning 59 1/2
  • Guaranteed Growth
  • Competitive Rates of Return
  • Compounding Interest
  • Leveraged Death Benefit
  • Income Tax-Free Death Benefit
  • Tax-Free Distribution
  • Pension Maximization
  • Disability Benefits - My funding goals can continue even if I become disabled
  • Accelerated Benefits - Terminal Illness
  • Unlimited Funding Potential - The government doesn’t limit how much I can save
  • Allows Use of Other Assets – Assets are replenished for surviving spouse or children

The reality is, no other financial instrument can deliver all of these benefits in one account. If we’re honest about it, most people who fund a 401(k) are simply following conventional wisdom rather than making a conscious and informed choice based on the benefits of one particular product or strategy over another. Once they learn the truth, they make the logical better choice.

Buy Term and Invest the Difference?

Naysayers may tell you that permanent life insurance is too expensive–that you should buy the cheapest term insurance and invest the difference. While Term Life Insurance certainly has its place, the wholesale dismissal of permanent life insurance in favor of investing, is a strategy promoted by the very institutions who are asking for your investment dollars and at its best is fundamentally flawed. Over 70% of our nations’ retirement savings is currently invested in accounts which are subject to market trends with a high potential for loss. This amount of risk has proven itself in our recent past to be a huge threat to the retirement plans of millions of Americans. A 37% loss in 2008 (S & P 500), caused many folks to change their retirement plans. Some had to delay retirement for as much as 10 more years, while others had to go back out into the work force, still more had no choice but to simply downgrade their lifestyles. In hindsight, some have started calling this strategy, Buy Term and Lose the Difference.

What else do I need to know about Life Insurance?

The safety of your retirement account is only as safe as the institution that holds your deposits. Generally speaking, the strongest insurance companies are much stronger than the strongest banks and they are far more liquid. Moreover, the insurance companies that we are referring to are well over 100 years old, some as much as 160 years old.

For more information about our firm and the services we offer, send us a quick email or call the office. We would welcome the opportunity to speak with you.   |  (805) 777-7799