"Rent" an inexpensive Term Life Insurance policy to ensure that the dreams your loved ones have are financially possible - whether you're here to see it or not!
If I had the opportunity to "do over" my financial life (I'm 71 now), I would take the match offered in my employers' 401(k) plans, open a Roth IRA for myself, and invest any remainder in a cash value life policy.
An employer's match is free money.
Isn't that the best kind?
A Roth IRA requires additions to it that have already had the taxes paid on it. Think of it as paying the tax on the "seed" rather than on the "crop." After the account has been open for 5 years and the account owner is at least 59 1/2 years of age, all withdrawals coming out are 100% TAX FREE - regardless of other income! Typically held in a Roth IRA are investment accounts and some annuities. Certain earnings restrictions disallow higher wage earners from contributing to a Roth, but anyone can convert a traditional retirement account to a Roth by simply opening an account, paying the taxes on the money going into the account, and let the money ride at least 5 years.
Cash value life insurance an excellent way to leverage money. The saying is, " pay pennies to buy dollars!" When premiums are paid, part of the payment goes to the cost of life insurance and in the earlier years the major portion goes into a cash value account. All growth in the cash value account is tax deferred (as it grows, you owe no taxes), and when handled properly, all money taken out of the account is TAX FREE. How? First, life insurance death benefits are tax-free. Second, loans can be taken against the cash value account, and loans are not taxed. If the loans are not paid back, the loans are simply taken from the death benefit. It ain't rocket science!
Additionally, consider that low-cost long-term care coverage can be added to a cash value policy more inexpensively than buying a long-term care coverage independently. If an insured cannot perform 2 of the 6 activities of daily living, many policies offer a monthly benefit as much as 2% of the death benefit. Consider that a $250,000 death benefit would pay $5,000 per month in this example. Why buy an expensive, stand-alone long term care policy?
One type of cash value life insurance that I especially like is known as an Indexed Universal Life (IUL) policy. The cash value in the policy is tied to a financial index like the S&P 500, but it is not invested in the S&P 500. When the index is positive, the policy is credited by the amount of gain up to a certain limit - typically withing the 12-13% range. If the index has a negative return, the policy is credited 0%. No losses are possible due to market risk!
I carry an example illustration in my briefcase for a 28 year old male contributing $500/month to an Indexed Universal Life policy and then discontinuing premiums at age 65. I used an assumed return rate of 6.5%. At age 65, he can withdraw as loans $78,275/year for the rest of his life. If he dies at age 92, he will have taken tax free loans of $2,113,425 and his beneficiaries will still receive $348,022 as a tax free death benefit. His totals premiums would have totaled $384,000. See why I like them so much?
Now I want to address a huge advantage that many Indexed Universal Life polices offer. It's not a difficult concept, nor is it easy to explain. So, I will refer to the example above. When the policy earns market credits, they are calculated on the full account value. Even though he received tax-free payments of $2,113,425, the market credits are calculated as if the money were still in policy. Technically, it is - as an account receivable. He's borrowing against the policy - not from the policy. For example, if the market credit was 5% that year, the policy would receive a credit of $2,113,425 x .05 = $105,671! What a benefit!
Who am I?
I am a piece of paper.
I am a promise.
I help people see their dreams.
I am an education for their children.
I am savings.
I am real estate property.
I lend money when you need it most – with no questions asked.
I pay off mortgages so that families can remain together in their own home.
I create, manage, and distribute property.
I guarantee the continuity of business.
I protect the jobs of employees.
I am evidence that a man or woman is a good spouse and parent.
I am a declaration of financial independence.
I am a certificate of character.
I am protected by laws.I bring dignity, peace of mind, and security to the latter years of life.
I am the great social compact that merges the individual into the immeasurable strength of humans standing together.
I supply investment capital helping smoke go up chimneys, wheels turn, and motors hum.
I guarantee that there will always be Christmas, with tinsel, a happy fireside, and the laughter of children.
I am the guardian angel of the house.
It's all in the Numbers!
Term insurance is probably the simplest type of life insurance to understand. A contract is entered in to between an insurance company and the owner (purchaser) of the policy. A determination is made at the inception concerning how long (the term) the policy will remain in force as long as premiums are paid on a timely basis. If the insured doesn't die during the term, there is no death benefit paid. Because of the very small probability of someone passing away at a young age, term life insurance is quite affordable for many people with young children. These folks are my favorite candidates for term insurance.
Policies may be designed differently. For example, a policy might carry a "right of renewal" when the term period ends. Others may be "convertible" to a permanent cash value policy without the insured having to prove to the insurance company that they are still in good health. This could be very important for an insured who developed a terminal illness but is expected to outlive the length of the term policy.
The owner doesn't have to be the one whose life is insured. The owner only has to have what is referred to as an "insurable interest". This simply means that the policy owner must be in a position to lose financially if the insured passes away. And this only has to be the case when the policy is purchased. So a divorced person can keep a policy on a former spouse as long as the premiums are paid.
However, if you think that your health is excellent enough to try to obtain the very best rate possible, click the button below. I will receive your message and will immediately contact you. In addition to completing a much ore detailed application, a nurse technician will make an appointment with you to take a urine and blood sample. The company may also request medical records from you doctors' offices. The entire process may take four to six weeks. It's a process, but it's not difficult.
Term life insurance enjoys many of the wonderful benefits permanent life insurance offers:
TAX FREE DEATH BENEFIT
AVOIDS PROBATE SO NO ATTORNEYS ARE REQUIRED
BENEFICIARY DESIGNATIONS ARE PRIVATE