Life insurance has a very simplistic reputation. You purchase a life insurance policy so that in the event that you die, your survivors receive a lump sum of cash to use for any number of purposes, not the least of which would be to pay off the bills that you left behind. Whether this reputation is earned or not is neither here nor there, because the fact is that there has been a massive evolution of cash value life insurance policies as we used to know them, and these changes are very exciting!
People aren’t just using life insurance to pay off bills and death taxes anymore. The public has slowly been awakening to the idea that life insurance is an incredible tool to use to leverage and grow ones estate.
Businesses are using life insurance to cover key employees so that they can cover the losses that the key employee may have brought to the company, and be able to hire and train a quality replacement.
Businesses are also leveraging life insurance contracts for business partners, where when one passes away, that the proceeds from the death benefit of a life insurance policy can be used for the other partner or partners to buy back ownership stake from the deceased executive’s spouse under buy-sell agreements.
Flexibility has also increased exponentially in life insurance policies, specifically with the rise of Indexed Universal Life insurance, or IUL. An IUL allows for flexibility in being able to adjust premium amounts, and also has a very powerful indexed account which follows the market and allows for the policy to participate in gains up to a cap (generally in the 12% to 14% range), without the risk of losing any of your principal or capital gains if the market goes down.
Once you grasp the power of that concept, IUL policies begin to look incredibly attractive!
Today, life insurance policies are so much more than death benefits. They are incredibly versatile investment vehicles that allow you to buy a dollar for pennies, and can provide you with security, and not just as a result of the death benefit that they provide. They are also very dynamic investment tools that can provide you with peace of mind that no other type of investment offers. Watch the video interview with retirement specialist Harvey Garza who also contributed to this blog. http://rightonthemoneyshow.com/the-evolution-of-cash-value-life-insurance-harvey-garza/
