Whole Life Vs Term – Is Whole Life Insurance Bad or Good?

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Whole Life Insurance Bad or Good

Whole Life Insurance Bad or Good

Whole Life Insurance Bad or Good I got a question for you to suppose you knew a tornado was coming toward your home there is no way you could avoid it you are right smack in its path so the question is would you cancel your homeowners insurance just before the tornado is going to strike well of course not that would be one of the dumbest things that you could ever do right well when I think of that question its always perplexing to me why people buy life insurance throughout their entire working life and then cancel it just about the time they retire now I realize there’s a lot of financial advisors and radio talk-show hosts who say that

 

you don’t need life insurance when you’re retired or when you die I say that’s just absolutely crazy so let me get this straight you buy life insurance while you’re young just in case but statistically you arent going to die then lets fast-forward 30 or 40 years and you drop it when this when statistically you are going to die that is to me like cancelling your homeowners insurance just before the tornado hits well lets analyze why people drop their life insurance the first and most prominent reason is they didn’t plan to have it their entire life they likely bought some term insurance and the older they got so did the cost went up then at some point the cost was so prohibitive that they were forced to drop it even though

 

they still might want it or even need it you know the insurance companies understand this that’s why term insurance is so cheap when the likelihood of a claim is low and its very expensive when the likelihood of a claim is high you know flood insurance is really cheap in the desert where there’s no flowing water-dirt cheap why there arent any floods however flood insurance living next to a river that has a history of flooding homes is very expensive and the same goes with life insurance you’re at a much higher risk at 80 years old than you are at 20 did you know that term insurance ends up paying about 1 to 2 percent of all those who own term insurance get a death claim the other 98%

Whole Life Insurance Bad or Good

who buy term end up dropping their insurance before they die let me let me say this too I think term insurance is an important part of preparation but it was never meant to be a lifelong asset it was meant to cover a short period of time in case of an unforeseen accident or health issue and that’s a good thing and many young families need to take advantage of term insurance and tell or while they’re building up their permanent policies now I know that none of us buy homeowners insurance or car insurance hoping that we get into an accident just so we can make a claim, in fact, itd be nice

 

if you went your entire life without having a claim on your home or your car right and statistically i guess that’s possible you may be one of those lucky ones that sneaks past having a homeowners or an auto accident and that’s great however its absolutely impossible to get out of this world alive I don’t hate to be the bearer of bad news but were all going to expire at some point its not if its when now hopefully you have a long life a tia but no matter how long you live at some point its going to be over so when you look at it this way it seems the most important insurance you can ever own is life insurance because you know

Whole Life Insurance Bad or Good

what you will have a claim someday now i know the guy on the radio says you’re going to be so wealthy by investing in the stock market that you wont need life insurance but that is just not true in fact from what I see the wealthier family is the more life insurance they try to buy so what do they know well ill tell you what they know first they know that if you properly structure a whole life policy you can use it while you’re living and when you die well you cant use it when you die but someone can this is an important point you don’t have to structure a policy that’s all about the death benefit if you structure a policy for both living benefits and death benefit you’ve created a real asset for yourself and your family now

 

it has to be done right you can’t just walk into any licensed agent out there and assume that they know how to engineer a policy to maximize these benefits nor how to manage it along the way see when you design a well-engineered life insurance policy you have benefits like crazy let me ask you something if given the choice would you rather rent a house forever or would you rather buy a home and then down the road own it someday my guess is you’d probably like to buy a home that’s a little more attractive

you well did you know that you can actually own a life insurance policy a lot of people have never been told this but not every policy can be owned in fact the majority of the policies are more like renting term insurance is essentially renting death benefit universal life the insurance component is renting death benefit every year you pay rent but the day you stop paying rent its over you have nothing to show for it all that money is wasted now whats worse is if you want to or you need the insurance

 

you always have to pay the rent forever every year rent has to come from somewhere you either paid out of your pocket or it comes out of your cash value but it is coming out now if I contrast that with a well designed whole life policy its structured so at some point you own it its I paint off the mortgage it’s yours and it truly is an asset its an asset that can produce tax-free income while you’re living as well as a death benefit now how would that be you can have an additional income stream that’s tax-free that can last a lifetime

Whole Life Insurance Bad or Good that will also not be added when calculating your social security to see if its going to be taxed now more on that another video but suffice it to say that many retirees have their social security taxed because they’re getting income from other sources that has to be calculated into that tax well life insurance income doesn’t count take as much as you like now this is a huge living benefit if you structure it properly and that’s what we are really good at its also an asset that lets you have access to capital for purchases or expenses or opportunities, in fact, you can even become your own financing company make loans take loans pay them back and have yourself and your or your family in your financial system

 

then in the end when you die you leave a legacy for your family you give them the comfort they need to provide for themselves when you’re gone or you simply pass it on in your estate because its the most efficient assets you can have to transfer to your heirs this is why the wealthy just don’t buy whole life insurance but they buy as much as they can get its interesting once people really grasp this concept of an engineered high cash value policy not only do they want one but they want as much as they can get but the sooner

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Whole Life Insurance Bad or Good you get a well-designed policy the better you’ll be able to use it your entire life long and unlike a retirement plan you’re going to have access to the cash anytime for any reason and as I’ve said you have a tax-free income as well and you decide when you want to do this its simply a matter of allocating some funds that would normally be allocated in your safe money investments its that simple each year you have it gets better and better

 

if we fast forward 10 20 30 years you’re going to love what it can do for you then you can pass on your estate in the most efficient manner possible you have the insurance in place when you neva table say goodbye to this planet so I go back to my original question would you cancel your homeowners insurance just as the tornado or the storm was heading your way now were all going to expire at some point are you going to pay premiums your entire life and then not have a policy in place when the day comes that you expire that seems kind of silly doesn’t it well to learn more or if you have any questions please shoot me an e-mail ill answer them just as quick as I can till next time take care

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