Life Insurance Facts : How to Use Life Insurance as an Investment

To use life insurance as an investment, obtain an insurance policy that builds cash value, such as a universal policy, a whole life policy or a variable universal life policy. Use the cash that is made from premium investments of an insurance policy with tips from an insurance broker in this free video on life insurance.

Expert: Vic Schumacher
Contact: www.HPEFinancialServices.com
Bio: Vic Schumacher is part of HPE Financial Services, a brokerage insurance company representing all major carriers.
Filmmaker: Christopher Rokosz

Category:

Howto & Style

Tags:

• life insurance
• finances
• personal finance
• buying life insurance
• insurance policies

[blueangel7883]

And it's overpriced life insurance too

[blueangel7883]

Cash value "whole life, universal life, variable life" is an awful investment to have in your portfolio. Buy Term and Invest the Difference! Cash value is guaranteed to screw you over one way or another. If you die before you take out your cash value all your savings go to the insurance company and not your beneficiaries. Your money only grows 3-4% after first three years which grows at 0% and if you take out some of the money and still are keeping the life insurance they charge you 7-8% to pa

[GuitarOwl]

@magicktrick Oh I agree. I plan to do other things but WL is great for long term. What I mean by getting paid twice is because you get what you put in and then you almost get that same amount when you die. Your right I double checked and it is around 4MM. But with what I'm doing I would be getting a little above 6% for the policy I'm getting. But your right it is 4.5MM or so.

[magicktrick]

@GuitarOwl regardless of what joe said, whole life can be a good supplement for retirement while providing a growing death benefit over time. You would want some market exposure as well, but Joe's numbers a little off. Earning 5%, which the average lifetime IRR is on WL, you would be closer to 4MM. Also, the S&P has had years of negative return so it depends on when you entered the market. That's why investing is for long term, and WL is a good guaranteed fixed portion of an overall portfolio

[joepirsoto]

The flaw in your plan is that when you give you money to a life insurance policy, they make the 37 million and give you the 3.5 million. Trying to make real money in any kind of CV life insurance is like trying to dump water out of the Titanic to keep if from sinking.

[joepirsoto]

Now this is VERY important to you: The S&P index over a 30-year period has not dropped below 10%. In fact from Dec of 79 to Dec 09 the S&P was 11.23%. Now, your same money (15k a year over 50 years) invested at an average of 11.23 will grow to $37,790,161 million.

[joepirsoto]

☺ Now we’re talking real numbers. From what you said you look to be 23 years old, or about. And if you want 15K a year to turn into 3.5 million would have to get you a ROR of about 5%. (FYI, I am so happy to see a young man like you taking charge of your money like this, good for you.)

[GuitarOwl]

@joepirsoto my beneficiary will get another 3 million dollars. To me that's like getting paid twice. I can take the money out of the CV or since my CV is so high I can just live off the dividend. To me that is a great choice.

[GuitarOwl]

@joepirsoto Ok lets use some big numbers here for a moment. This is what I plan on doing anyway. If I put 15K into a WL policy every year till I retire around 73 ( I love what I do so I plan to be there long plus with retirement going up lol) I will have put in the policy 750K through out my life. BUT my CV will be around 3.5 million and the death benefit be at 5 million. If I took out lets say 2 million for retirement after only putting in 750K I think that is a good deal and then when I do die

[joepirsoto]

If you wanted to, take a look at a WLP contract and read the section on "cost of insurance." This will blow your mind. Think of paying $100 a month in premium but your monthly cost of insurance is $300 or more and growing every year. This WLP's are designed to laps when people are alive and then guess what... that's right you have to pay the loan back & with taxes. That is one of the reasons people say buy term.