With a lot of the news surrounding the economy and how bad
it is, I thought it might be a great time to discuss life
insurance and how it might be time to really consider it as
a way to diversify your portfolio.
A dear friend of mine forwarded a link to a discussion on
CNBC about how life insurance is a good investment. Now, I
have to admit, I have always known that a life policy with
a cash value option is a good product to have in your
portfolio. I was really happy to see someone who agreed
with me.
Here is the link:
http://www.cnbc.com/id/15840232?video=697206891
Whether the economy is good or bad, you cannot go wrong
with a life policy that allows you to save in a cash value
account. Why? Because your cash value savings is
tax-free! Yes, this is one of those very few places that
the government still allows us to save tax-free. With a
guaranteed interest rate of 2-4% on most of these life
policies, if you calculate in the fact that you are not
going to pay taxes on the GAINS, it's a win-win situation.
Why is tax-free savings a good thing? Here is an example of
how taxation works:
If you take a dollar and double it 20 times and minus the
tax, you will have about $28,466 left.
But, if you take that same dollar and double it 20 times,
without tax, you will have about $1,048,576!
This example should show you the power of saving tax-free.
Here is a great explanation of EIUL that I found on line:
Equity indexed universal life insurance offers a unique
combination of affordable life insurance with the ability
to accumulate cash values that grow with the upward
movement of a stock index without the normal downside risk
associated with the equities market. Combine the benefits
of upside cash value growth potential with the tax benefits
associated with life insurance and a minimum guaranteed
interest rate and you have an optimum vehicle for
accumulating cash.
The important part to understand is that you are
participating in the market, BUT you are not going to be
participating in the downside risk. What that means is you
will enjoy the gains, but if the market goes down, your
cash value does not go down in the slightest. You will
keep all your gains and not risk a dime.
I recommend that everyone should at least look into an EIUL
policy as a way to diversify your investment portfolio
without much risk. There are many things you need to know
about an EIUL policy, and your insurance agent can help you
determine if it is right for you. Some of these policies
can be expensive to purchase. There are also limits to how
much you can put in this account each year, but the good
news is, the amount you can save within the policy is
always more then the annual limit on an IRA. Also
remember, this is tax-free savings, not tax deferred.
----------------------------------------------------
I help women and heart-based business owners learn how to
get to the core of their inner and outer money blocks and
to bring about a successful joyful relationship with money
and finance.
Go to http://www.wealthharvest.com and sign up for my FREE
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