Is a permanent life insurance policy a good investment for retirement? It’s a question we are often asked on our Tuesday livestream. There is no shortage of people wondering if a permanent life insurance policy could offer tax benefits in retirement and provide for your family when you’re gone. As with nearly every great debate, there are three different camps: those who believe permanent life insurance makes a great investment, those who are strongly opposed to the idea of life insurance as an investment, and those who aren’t sure what to believe.
I think it would be valuable for a follow-up article to go deeper on why IUL is terrible. In my understanding, the underlying insurance component is a 1-year auto-renewing term policy. So as the insured ages, the premiums can only increase. In a long bear or flat market for 2-3+ years at the 0% floor, those premiums can cannibalize the cash/investment portion and/or require additional premiums to avoid lapse and a possibly a huge tax bomb.
I think a follow-up to explain when it might be worth considering Whole Life; the content team usually does a great job being fair and explaining both sides of the coin. I 100% agree that insurance is not an investment vehicle. It's insurance first and a wealth preservation tool second. I heard a rule of thumb to not bother with Whole Life until you can max all retirement accounts and have a good chunk of savings leftover. You have a lot of mutants who fall into, or are striving for, this category.
Please touch one some scenarios such as...
- how a real estate investor or serial entrepreneur could leverage WL (infinite banking; Walt Disney)
- how & why corporations use it (Bank of America, for instance)
- estate planning & generational wealth (Rockefellers vs. Carnegies)
- riders, such as Long Term Care (vs. stand-alone insurance)
Great read as always. I like the way you explained it is a benefit that you don't receive a payment, not a disincentive. I don't want to die just so someone can have that money lol. I did very little right before I found Dave Ramsey and then graduated to The Money Guys but I'm thankful I bought term life insurance instead of an alternative. Any little thing I got right before learning is just a win in my book.
P.S- I definitely would pay to support this as I believe in supporting companies, not just ideas. I just don't understand the pre pledge setup. Keep up the good work though and love all the research you provide to the team each week!
The Truth About Permanent Life Insurance
I think it would be valuable for a follow-up article to go deeper on why IUL is terrible. In my understanding, the underlying insurance component is a 1-year auto-renewing term policy. So as the insured ages, the premiums can only increase. In a long bear or flat market for 2-3+ years at the 0% floor, those premiums can cannibalize the cash/investment portion and/or require additional premiums to avoid lapse and a possibly a huge tax bomb.
I think a follow-up to explain when it might be worth considering Whole Life; the content team usually does a great job being fair and explaining both sides of the coin. I 100% agree that insurance is not an investment vehicle. It's insurance first and a wealth preservation tool second. I heard a rule of thumb to not bother with Whole Life until you can max all retirement accounts and have a good chunk of savings leftover. You have a lot of mutants who fall into, or are striving for, this category.
Please touch one some scenarios such as...
- how a real estate investor or serial entrepreneur could leverage WL (infinite banking; Walt Disney)
- how & why corporations use it (Bank of America, for instance)
- estate planning & generational wealth (Rockefellers vs. Carnegies)
- riders, such as Long Term Care (vs. stand-alone insurance)
Thanks for loading us up! Love ya team,
Shea (Go Bills)
What about life insurance with a long term care rider?
Great read as always. I like the way you explained it is a benefit that you don't receive a payment, not a disincentive. I don't want to die just so someone can have that money lol. I did very little right before I found Dave Ramsey and then graduated to The Money Guys but I'm thankful I bought term life insurance instead of an alternative. Any little thing I got right before learning is just a win in my book.
P.S- I definitely would pay to support this as I believe in supporting companies, not just ideas. I just don't understand the pre pledge setup. Keep up the good work though and love all the research you provide to the team each week!