Myths About Life Insurance (2)

admin — Mon, 28 Sep 2009 13:04:35 +0000

Assuming that you don’t dip into your investment for at least 20 years, your total return from a whole life policy, including the death benefit and investment return, is likely to be higher than what you would earn by purchasing a similar amount of term coverage and investing the cost difference in municipal bonds – which is a comparable investment in terms of both risk and tax treatment. Other permanent insurance options include variable universal life, which might be appropriate for younger couples in their 20s or early 30s, since the investment component could be put in high-growth mutual funds … and universal life, which can be appropriate for those whose income can fluctuate significantly from year to year, such as sales professionals, since it allows the insured to determine the premium paid in any year. *Rates subject to change. Other benefits of permanent (case-value) insurance: You can borrow against the cash value of your policy at reasonable interest rates. Also, withdrawals up to the amount of your investment are tax-free. Of course, permanent insurance loses its appeal if you need access to your money before two decades or more pass. Life insurance companies front-load their fees, so if you withdraw the money before then, your investment return will suffer disproportionately.

Colorado Marine Officer » Five Common Myths About Life Insurance

Myths About Life Insurance (2)