by baldwinn » Fri Jan 20, 2012 9:48 am
With life insurance the sooner you lock in coverage the cheaper it is and you eliminate the risk of becoming ineligible later on should a health complication develop.
My mother used an old IRA she had sitting around losing money - converted it over to a whole life policy for my daughter...her 40K IRA will become more than 700K cash value (age 65) when my daughter is retirement age...will have life coverage her whole life and will have a death benefit of 1.4 million at age 65 that will continue to grow for life. She can tap that or leave it to her family tax free upon her eventual death.
Meanwhile should my mother need to access the cash to perhaps supplement her retirement for some reason - the money grows tax free and can be accessed tax free.
For parents, grandparents with health issues or who just want to leave something behind even a small amount will grow given the timeline and steady growth of the policy.
It doesnt replace an entire portfolio but its an asset class for a reason - it creates an instant estate...the 40K bought an immediate 360k coverage that grew to 1.4 million with ZERO premium after the initial 40K purchase.
Remember that besides the cash growing the company also pays policy holders a dividend yearly - the larger the cash value the larger the dividend (stake in the company) The dividend rates have hovered around 7-8% this last decade for this policy.
Talk to an agent - look at the illustrations for yourself - its an important part of a balanced portfolio....tax free growth AND distributions - when you retire the distributions are very important