Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Video Transcript: Today's question is, "Is life insurance a good investment?" Well, that's a very controversial question. Depending upon what form of cash value life insurance you use, you could be using a participating whole life, you could be looking at current, assumption, interest rate, universal life, index universal life or variable life. All of those four different platforms require you to do a financial profile to make sure you understand your investment risk and the time horizon, which are very important to use this.
They have tax advantages, there's no doubt about that, but you need to make sure that you're suitable for these products. Is it a good investment? If it's configured right, it can be great. If it's not done correctly by design, it's not going to really be a good deal. So, if it's done correct, it could be a great supplemental part of your retirement plan that can really help you in your golden years and during your retirement period.
One reason that life insurance can be a good investment is because it is safe. Life insurance that has been tucked away can be a source of great comfort and surprise to survivors. Unlike other investments that have strict tax guidelines to follow, a forest of paperwork arriving in the mail, and the constant need of evaluation, most life insurance policies are pretty steady and low maintenance. And sometimes slow but sure is a good type of investment to have.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Good question and here's the blanket answer: YES! Life insurance is like buying future money at a big discount. However the type of life insurance and subsequent events play a big part in just how good the investment turns out. For example if you buy a Term policy and you don't die before the term expires you've only benefited the insurance company. Good investment for THEM.
If you buy a Whole Life policy with a Mutual company that pays dividends then it is the safest, surest investment available to grow your wealth tax-free! Every seminar I've attended, the speakers have all said that their whole life policies have been their best investments because they have no downside risk and just continue to grow their cash value and without having to pay taxes on the gains.
.JPG){kind=avatar}
They have tax advantages, there's no doubt about that, but you need to make sure that you're suitable for these products. Is it a good investment? If it's configured right, it can be great. If it's not done correctly by design, it's not going to really be a good deal. So, if it's done correct, it could be a great supplemental part of your retirement plan that can really help you in your golden years and during your retirement period.
If you buy a Whole Life policy with a Mutual company that pays dividends then it is the safest, surest investment available to grow your wealth tax-free! Every seminar I've attended, the speakers have all said that their whole life policies have been their best investments because they have no downside risk and just continue to grow their cash value and without having to pay taxes on the gains.