When Should You Invest in Life Insurance?
Life insurance isn’t usually seen as an investment for investors, providing peace of mind and assistance in times of need, but not growing quickly enough over time. For the portfolio builders out there, the hot ticket items are real estate, retirement accounts, and the stock exchange, and by comparison, life insurance seems like a fairly boring addition to an otherwise thriving portfolio.
Many investors have decided to leave life insurance out of their portfolio entirely, and even those that appreciate the security of life insurance are tempted to opt for simpler term life policies. All of these entities, from investors to experts in the field, are debating the worth of life insurance and trying to figure out exactly where it fits into an investor’s portfolio.
The Role of Life Insurance
Many don’t understand that life insurance was never meant to be an investment, but instead a protective measure for your heirs. Those expecting a life insurance policy to grow significantly in value would likely be disappointed simply because these insurance policies are not designed to be investment vehicles – they’re meant to be failsafes. With term life insurance or even whole life insurance, the point isn’t the financial growth – it’s the guarantee that your family’s expenses will be taken care of after you die, and unlike most investments, buying life insurance isn’t risky.
A Good Investment or a Great Investment?
The benefits of having life insurance speak for themselves, and even if you’re not ready to truly invest in life insurance, alternatives exist. Term life insurance, for example, is much more affordable than whole life insurance, and unless you’re planning your estate, making buy-sell arrangements, or trying to maximize your pension, it should meet your needs. By buying a term life insurance plan, you can enjoy the peace of mind and security of life insurance without worrying about growth or complicated pricing.
If you’re serious about investing, however, you shouldn’t dismiss whole life insurance quite yet. Many believe that whole life insurance is a bad investment, but that’s simply not the case. With a whole life insurance policy, you can begin building up tax-shelter savings that can help you plan your retirement, and having that steady balance in your portfolio will make it better-rounded as a whole.
While not created specifically as an investment product, insurance policies provide something that investments don’t: security. A balanced portfolio can’t be all risk, and insurance products are the perfect way to bring order to an otherwise risky investment strategy. Even when the market is down, whole life insurance can grow, sometimes even outpacing market growth entirely.
Annuities can also serve an important role in your investment portfolio, guaranteeing income streams that you can draw from upon retirement. You can never outlive an annuity, solving one of American retiree’s biggest problems.
When it comes down to the bottom line, it’s less about investment and more about your overall financial strategy. Investing is all about risk and reward, and if you don’t have life insurance, it’s probably time to introduce some stability to your portfolio.
Interested in an affordable life insurance policy? Give us a call or click today for more information on what we offer and why we’re the best insurance company for your needs.