It is amazing you have actually clicked on to this page. Life insurance is a subject that most people don't like to discuss. It is, however, vital to a families financial security, should a premature death occur. Many in this industry have made this subject very complicated in order to market high cost, low benefit policies that are very difficult to understand. So don't feel alone.
It doesn't have to be that way!! Let me see if I can help.
Life insurance policies are divided into two basic categories, Term and Cash Value policies. You are probably familiar with the cash value types. They build cash value inside the policy that you can borrow from. Sound Familiar? The insurance is usually so expensive that the average family can only afford far less than they need, leaving their families financial security at risk. The cash value (savings) earns a very poor return. Any money you borrow from the cash value will reduce the death benefit by the amount borrowed. Do any of your other types of insurance have savings in them? Why does life insurance?
I believe Term Insurance is the best buy in most cases. It is simply insurance, like your auto, health, boat and homeowners. If you need it, it pays. Life insurance should never be bought as an investment. There are usually much better places to put your savings dollars than into life insurance.
I have been giving seminars on this subject for over 20 years and I could give you pages of information on this subject but I am not going to. Aren't you glad? However, let me give you an example that will help to illustrate my point.
Let's assume a 35 year old male needs $250,000. of life insurance. That may seem like a lot to you, but consider what it must do should you die. Pay debts, educate children, pay funeral expenses and supplement income for the surviving spouse. A $250,000. Whole Life policy for our 35 year old will cost around $3,000 per year and accumulate about $60,000. in cash value in 20 years. If he died his beneficiary would get the life insurance but not the cash value (your savings). If he does take out any of the cash value before he dies, it will be considered a loan and reduce the death benefit until paid back. NOTE: My mom got nothing when my Dad died at age 49 because the loans and the interest on them had accrued to an amount equal to the death benefit. So the check went to the insurance company not my mother after a lifetime of paying premiums.
On the other hand $250,000. of Term Life Insurance will only cost our 35 year old about $500. per year. Same death benefit to the family. That would leave $2,500. to invest in a TAX FREE ROTH IRA. If it averages 10% per year it would be worth $145,000. in 20 years. That's nearly $100,000. in tax free earnings. Should he die his family gets the insurance and the cash in the IRA, you don't have to borrow you own money, taking cash does not lower you death benefit. And it will all be left to your heirs not the insurance company.
He gets more if he lives. His family gets more if he dies. Better returns on the savings. No borrowing your own money. No loss of cash upon death. Inexpensive life insurance, and a much better TAX FREE savings plan.
I would like to give you the opportunity to see what a "Buy Term and Invest the Rest" plan can do for you. I will provide you with a FREE proposal if you submit the form below to my office.
