Agent Owner, Gilmore Insurance Services, Marysville, Washington State
can life insurance be used as an investment? Yes, it can. Life insurance has been used as an investment for hundreds of years. While there are some who try very hard to tell you why it's not an investment, they always seem to never get around to talking about RISK and how there are different levels of risk with different types of investment. Usually, when beating up life insurance, a equity is used with a hypothetical 12% return on the equity. They never talk about Risk and what role it plays in an investment.
Choice A pays 5% return steady over time, chugs along never goes backward, even in a down market and has a .001% chance of failure.
Choice B can pay 30% return in any given year or lose 30% in any given year. It can go backwards, it can double extremely fast and it has a much higher potential for failure.
Which should you own? How about Both? One is a safety net which allows you to accept more risk with another choice which can reward you for your efforts. However if it fails to live up to it's potential, the other safer route keeps you from losing everything.
So yes, life insurance can be used as an investment, should it be your only choice? no, not really, no more than straight equities should be either. Hope this makes sense.
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Choice A pays 5% return steady over time, chugs along never goes backward, even in a down market and has a .001% chance of failure.
Choice B can pay 30% return in any given year or lose 30% in any given year. It can go backwards, it can double extremely fast and it has a much higher potential for failure.
Which should you own? How about Both? One is a safety net which allows you to accept more risk with another choice which can reward you for your efforts. However if it fails to live up to it's potential, the other safer route keeps you from losing everything.
So yes, life insurance can be used as an investment, should it be your only choice? no, not really, no more than straight equities should be either. Hope this makes sense.