Imagine if I told you that you could buy dollar bills at a discount? How many would you buy? Maybe $2 million? Maybe $10 million? It would be smart to buy as many as you could afford right? Well there is a way that life insurance can do just that. When you start to see life insurance as an Investment Alternative you begin to understand how developing a life insurance strategy today will help you efficiently transfer guaranteed, tax-free cash along to your heirs in the future when you pass on. Life insurance can be viewed as an asset within your overall portfolio but one that helps you stay diversified.
Most of us invest to grow and preserve our assets so that we can retire comfortably, create a legacy for our heirs, and perhaps support charity. Many of us try to achieve these goals by investing in stocks and bonds, and owning real estate. Here are some of the reasons you should be incorporating life insurance into your portfolio as well:
It gives you the ability to leverage your money. When you buy permanent life insurance, you are paying a discounted price today to buy money in the future. For example, a healthy 65-year-old may pay $300,000 today so that her kids will receive $1 million upon his or her passing. Additionally when you buy life insurance inside of a properly structured trust, you can accomplish even more: The reason for this is that when the money is put into a trust, it is not included in your estate at death so this will reduce the size of your estate at your death, so there is less money to be taxed, and the eventual death benefit will be passed to your heirs income and estate tax-free.
The death benefit is often fixed and guaranteed. There is a lot of value to the word “guarantee.” How often do you buy an investment and know exactly what your return will be in the future? Not often. Take your stock portfolio as an example. History may tell you that you’ll average a 8% or 9% return each year, but that’s really not how it works. Some years, you’ll be up 15%, some years, you’ll be down 25%. You need a strong stomach to deal with all the volatility, good timing, and the ability to tolerate lots of risk if you’re going to invest in stocks. Life insurance eliminates this undesirable aspect of investing because it tells you exactly how much future money you are buying with today’s dollars.
Life insurance policies have the ability to generate tax-freecash in the future. There are various ways you can access the money inside your life insurance policy. Many people don’t tap it at all and simply pass the proceeds along upon their death. However, policies that have been in force for many years can be borrowed against, creating a tax-free stream of income that can be used for retirement, providing for college tuitiion or anything else. There are some guidelines provided by the IRS, so please contact us if you want advice in this area.
At Heavyhitter.co, our goal is to show you how to build and preserve your wealth. We think you should have a diverse portfolio that includes all sorts of assets. But we also want you to understand the incredible efficiency that a life insurance strategy can create within your estate plan
Contact a life Insurance agent today: Richard Sinton 702-949-0930
