If you hear someone say life insurance is not a permanent need then they are selling you something. Simply put, your life has value and for a couple of thousand dollars a year you can transfer the eventual risk of death to an insurance carrier for the guarantee of a financial gain for those you leave behind. Life insurance IS a permanent need.
Now if we are being technical the only needs we have in life are psychological, in that, if you don’t meet your need for safety, self-worth, significance, and connection then it will create severe psychological trouble. The only 3 bodily functions necessary for maintaining life are food, shelter, and water.
Life insurance is a want, as is any other financial product. Do you WANT to leave your family better off than they are today? Do you want to maintain the risk of loss to yourself or do you want to transfer some of those risks? DO you want to put into place a life insurance policy that will grow over time, or don’t you?
If the answer to any of these is yes then you need to have life insurance properly structured for you and your family to reach your goals, protect your family, and grow your income.
The purpose of life insurance
Life insurance was designed hundreds of years ago to assist towns and villages in the unfortunate event of someone dying. A village or town would get together pooling funds when they were able to and over time this would assure that as villagers passed away their spouse would be able to take care of the funeral and other costs associated.
Since then it has evolved to include benefits while the policyholder is alive. Permanent life insurance provides individuals the option to grow a portion of their income in a tax-sheltered policy. In addition, its growth and payment are guaranteed by age 100(earlier or later for some depending on the carrier).
This policy can be leveraged without withdrawing money from it allowing the growth to continue while at the same time purchasing other things. If used as a tool to accelerate investments you can essentially use your money twice creating a vehicle that snowballs the income growth of your finances.
The wealthy exceed the income limits for most standard retirement accounts that we are told to focus on making this the number one option they use. If it’s good enough for them, then it’s certainly an option you should be researching at the very least.
Who can you get life insurance on?
Life insurance can only be taken out on those that you have a personal interest in, most commonly yourself, your spouse and close family members, and business partners.
Now sometimes you personally cant qualify for life insurance but you want to get a policy to grow your income and accelerate investments. This can be done by purchasing a life insurance policy on your spouse or kids for example.
Why buy life insurance?
Are you alive? Do you have loved ones that count on you for their well-being either in a breadwinner, parent, or familial connection? These and other reasons make buying life insurance a permanent need. Not just while you are working but throughout your whole life.
So long as you have a pulse and you care about the lives of others, you have a need to get life insurance. It is used by the wealthy to pass on and create generational wealth.
What would it be like if you were the one to start an estate with investment education, proper accounting education, tax education, etc for your family to be able to create lifelong income for you, your kids, and your heirs for generations to come. This is the power of using life insurance in addition to gaining a stronger financial education of wealth building.
Also think about the fact that with life, death is inevitable. For every person you know, you also know they will die eventually. With every death, there is a loss, not just in life but often in income, even if it’s a stay-at-home mom the father will have to find a babysitter causing a new expense.
Life insurance gives your family financial support during a tragic life event. Those you name as beneficiaries can use it to pay off debts, pay monthly expenses, maybe go to college to improve their earning potential, start a business, or invest in real estate, or other means, just to name some.
Who needs life insurance?
The standard method of life insurance is sold is under the idea that you only need it if you are the income-earner and only until you pay off all debts. This methodology is garbage. It helps ensure a commission to the insurance agent while also almost guaranteeing for the insurance carrier no payout will occur.
I find this to be dishonest and disloyal to the client and the consumer.
I say that if you are alive, and you want to maximize your income potential, then you need a properly structured whole-life policy. In addition, you need to educate yourself more on how finances truly work and how to leverage a whole life policy combined with passive income strategies to build real financial freedom.
Financial freedom is not worrying about money, and let’s face it, all those you and I know focused on getting out of debt and working towards retirement still worry about money. So the simple fact is that traditional financial planning has let us all down and it’s time to stop holding onto financial viewpoints that don’t work and never have.
What is permanent life insurance?
Permanent life insurance is designed to stay with you your entire life. It is long-term life insurance that has two main components: death benefit and cash value growth.
One of the great things about permanent life insurance is that the cash value growth has a guarantee growth column. Illustrations also have a column that’s nonguaranteed but follows their past performance.
Permanent life insurance vs term insurance costs
Permanent life insurance options are more expensive premium-wise at the start of a policy and then get less expensive over time. With a well-constructed policy, you can make it so premiums are no longer needed eventually. As time goes on the cash value growth will begin to outpace the amount you have invested in the policy.
Term insurance on the other hand is the least expensive to start with and over time becomes more expensive. It gets to the point where it is outrageously expensive and makes no sense to purchase.
When to buy term insurance
Term insurance is still good depending on the situation. For example, someone just turning 18 and beginning to work, may not have the income for a permanent policy. They can get a term policy and then convert that policy later on.
You can also get a mix, a small whole life policy with a term rider. What this does is give the person a cash value growth component while lowering the needed premium amount. The term portion increases the death benefit value allowing for more cash to go towards cash value. This is something often done even with larger policies to better focus on that cash value growth.
If you still wonder if life insurance is a permanent need then consider some of the following for further reading:
Here at MoneyViewPoint, we are dedicated to helping you find the most optimal solutions to accomplish your goals. Contact us today to get started.
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