The Truth, the WHOLE Truth


hsa03 As thousands of readers know, last month I focused on the pros and cons of term life insurance. In review, term life is a monthly payment that provides a death benefit for your life for a period of time. There is, however, a type of life insurance that actually pays you money whether you live OR die. Would you be interested in supplementing your retirement with your life insurance policy? How would it feel to have your life insurance policy pay you each year?!?!
Here are the basics. First in a policy is the death benefit, or the money the family receives after death. This amount of money is guaranteed never to go down, but in some cases (as is guaranteed with my company), the death benefit actually goes up over time. For instance, a $250K policy on a 25 year-old, as long as premiums continue to be paid, can increase to well over $350K, due to dividends being added to the policy. In fact, $500K is easily reached, assuming the insured reaches his or her life expectancy.
Not only is there the death benefit, but there is also the cash value. The cash value is the amount that can be withdrawn from the policy, tax-free, to pay for expected or unexpected expenses, such as education, retirement, or a house down payment. At the age of 65, 40 years into the same policy, the cash value will be over $150K! Now, this policy will cost about $1,700 per year, and I understand that is a lot of money spent on a simple life insurance policy. On the other hand, this same policy will more than supplement your retirement. It will pay off a house without claiming it on your taxes at all. So over 40 years, about $70K will have turned into $150K.
No, this life insurance policy is not your entire retirement plan, but it is a way to protect your investments in case the market plays tricks on your investment (not that it would ever do that, right?). Another option for this type of policy is allowing the dividends to quit accumulating in order to pay the premiums for you. After about 15-20 years, the amount being put into the policy is easily enough to pay premiums for the policyholder. For instance, my grandfather-in-law has not paid a premium on his life insurance in about 30 years! He allows the free dividends to pay the premiums for him. So, using this option, the client can pay about $30K total for a $250K policy. He can even take out his cash value after his payments are paid for, and literally come out on top. After the 20 years, he can have over $35K in tax-free money!
Now, I understand I have covered a lot of information here, but here is what is most important. A life insurance policy can make you money in several different ways, as mentioned above. It can even be paid for by the insurance company. And you, the client, are GUARANTEED to profit from the policy in huge ways. Once again, this information is complicated and detailed. My advice and consultations are free, and I invite you to contact me to ask questions at any time.

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