It’s life insurance a good investment?
The two major types of insurance out there, one is called permanent life insurance when it’s called term insurance.
Let’s talk about permanent life insurance, first now in case you get confused it’s actually very very simple. the word permanent that should give you a clue is an insurance policy that covers your entire life.
permanent right now there are a few advantages to permanent life insurance the first one is tax-deferred growth.
for permanent life insurance, you build up the cash value over a period of time then you can borrow against it without paying taxes because essentially it is alone maybe you need that money to buy something maybe it’s for your kid’s tuition, you could do that benefit number two you don’t lose your coverage. after a number of years as long as you keep paying the premiums. in fact, that’s one of the key kind of advertising benefits that you see from a lot of the permanent life insurance ads and infomercials and commercials that you will see that sometimes in some cases it covers up to age a hundred and twenty years old until you get very very old as long as you keep paying the premiums benefit number
three they get the accelerated benefit. now, what does that mean? it means that you don’t necessarily have to wait till you pass a way to get the full benefit from the permanent life insurance. example let’s say now you’re a little bit older and you have a certain type of illness that you could take some of the money
out and take advantage of a few things where it pays for your medical bills. sometimes it’s up to 25% 30% 40% even up to a hundred percent.
so that you can still enjoy a good quality of life in your final years now the downside of that is, then your beneficiary would probably receive less than the full benefit but you will be able to use some of their money upfronts for yourself.
so that’s permanent life insurance let’s talk about term insurance so for the term insurance you’re basically buying insurance for a term it’s not permanent it doesn’t cover your entire life and all your monthly payment all your premium goes towards the death if something happens to you all the death
the benefit goes to your beneficiary it is that simple so for your term insurance it doesn’t have the cash value component and it doesn’t have the investment component so it’s life insurance a good investment. So here’s my recommendation if you are ones with basic financial needs and you don’t have a lot of
financial assets, complicate if I notice your assets to protect then permanent life insurance probably is not something that you need. term insurance, on the other hand, is something that you want to consider because it protects your family and the ones that you love, you shouldn’t consider that as an investment it’s really just a way for you to protect your family in case knock on wood something happens to you you’re not paying like a huge premium right because that’s not the goal you’re not gonna get rich with your insurance policy. it is simply a way for you to protect your family however if you have more financial assets and you have a business you have other things then you may want to consult with a professional, then maybe permanent life insurance makes more sense for you that’s my take.