INSURANCE . RETIREMENT . INVESTMENTS
The age-old Insurance questions: Should I get Life Insurance and Is Life Insurance a Good Investment? Do I NEED Life Insurance? These are the most popular questions our agents have received over the years from potential customers who were skeptical about taking out their first life insurance policy.
We have taken note of this and written this blog specifically with those questions in mind.
Here are 7 Reasons why Life Insurance is a Good Investment:
1. Peace of Mind – Taking out a Life Insurance policy is a personal investment that ultimately provides a financial safety net to the beneficiaries when you pass on. This is perhaps the most frequent reason Life Insurance policies are taken out.
It is particularly useful for sole breadwinners of families. A solid Life Insurance plan would give you that peace of mind knowing that should tragedy strike, your loved ones are covered with a cash payout that is enough to keep them on their feet.
2. Affordability – There are misconceptions that Life Insurance is an extreme expense to the policy-holder but this is not true. Life Insurance policies can be taken out with monthly premiums that are tailored for your budget. The larger the premiums, the more benefits that are afforded to the policy-holder.
This information can be obtained by speaking to an Insurance Agent today; Insurance Agents are also Financial Experts and have the experience and knowledge necessary in helping you find the perfect Life Insurance Policy.
3. Term and Whole – Life Insurance is available for a Term, which is a designated period of time, or Whole which covers the duration of your life. This makes the policy a good investment as you now have the flexibility to choose a type of policy based on your current needs.
Furthermore, should you select a Term policy, you have the option of turning it into a Whole Life Insurance if your circumstances change and you require more coverage.
4. Liquidity – The term “liquidity” refers to assets that can be easily converted into cash. Life Insurance policies are considered Liquid Assets as they are paid out in cash and provides your beneficiaries with fast access to much-needed money that has very limited taxes involved. This is seen as a better investment than physical assets which may not be very liquid due to the length of time needed to sell or convert them into cash.
Some may consider Antiques, Land or even Jewelry as prime investments but the illiquidity of these assets makes them unattractive in the long-term. Investing in Life Insurance however is more reliable as it provides your beneficiaries with instant access to a cash payout.
5. Not subject to Market Volatility – Guaranteed Life Insurance policies pay-outs are not subject to market volatility and your beneficiaries will always receive the amount that was specified in the policy. For example, a $500,000.00 Life Insurance policy will always be paid out as $500,000.00 to the beneficiaries regardless of poor market or economic factors at that time.
This makes Life Insurance investments very attractive, as opposed to investments in stocks where returns are not guaranteed but are instead dependent on market factors.
6. Your Future Insurability is Insured – Investing in a Life Insurance policy not only provides financial safety for your loved ones but also insures your own insurability. Sounds like a mouthful? This is how it works: If you are currently healthy and apply for a Life Insurance Policy, your application will be approved quickly and with a much lower premium as you are not perceived as a risk by the insurer.
That being said, should you develop health problems in the future, you would have already been covered under an Insurance Policy with a set premium that would have been negotiated previously with your insurer.
7. Collateral for Loans – Did you know that Life Insurance policies are considered accumulating assets? This means that you are able to take loans on and use your Life Insurance balance as collateral; the greater the cash value of the policy, the more flexible it would be as collateral.
Sounds good? We hope this blog was a great read and cleared up any misconceptions you may have had about Life Insurance. We thank you for joining us and we hope to see you again next week!