Common Sense Financial Podcast

Do you have life insurance as an asset class in your portfolio?

When I opened my business back in 1993, I started by selling life insurance and absolutely hated it.

So much so that I switched to offering investments as soon as I could to get away from life insurance all together…for a period of time.

I think I moved away from it because I didn’t like my experience with how it was being packaged and sold to people.

Fast forward 20 years to today after thinking and rethinking the topic of life insurance, I have come to the conclusion that when it is used and designed properly, it is an effective tool and has a multitude of practical applications.

For instance, what drove bonds higher was declining interest rates.

Now, interest rates are near zero with nowhere to go but up, leaving bonds susceptible to loss.

So, finding an alternative is important to help replace bonds as a way to balance the risk of stocks.

These historically low interest rates leave banks with little incentive to offer much of a return on a deposit account.

While bank accounts offer a safe place to store cash, yields are low and are taxable.

A specially designed life insurance policy could be the perfect replacement for bonds and bank accounts considering these policies have everything we are looking for without the same negative headwinds…3-4% yield…Favorable tax treatment…Access to cash.

My goal is to share these proper designs and purposes with you so you can you understand why these programs can prove to be a welcome addition to many portfolios and financial plans.

The key to learning is removing everything you have heard about life insurance to formulate a different perspective about how these plans work.