Life Insurance was never set up to be an investment. While the cash value in a good life policy can provide a good safety net and source of savings, never invest all of your funds for retirement in life insurance alone. If you have a low risk tolerance and desire safety then you also need to look at annuities. A Roth or Conventional IRA for example, provided by a good insurance company. Life Insurance is meant to be the foundation for a good retirement, not the entire structure.
A non-modified endowment life insurance policy designed with the lowest cost of insurance can be an excellent option to traditional retirement plans if you have more than 15 years to retirement, if the insured in your family is very healthy, if your present tax bracket is low, if your employer doesn't match your 401k contributions, if your employer doesn't offer a 401k plan.
Permanent cash value life insurance has four policies you should consider: Indexed universal life with access to domestic and foreign indices, Variable universal life with access to separate sub accounts featuring equities and bonds investments, current assumption universal life and participating whole life, which are interest rate credited.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Is life insurance a good retirement investment? Life insurance is part of a good retirement plan. It provides a safety net that allows an individual to assume more risk with other investments. If the question is geared towards one, single product, then any answer for anything would be no. Retirement planning is a combination of products, not a single one.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
Life insurance gives you what every investment program needs, time. If the interest market is very low, life insurance can compete with CDs and other guaranteed products. The best thing about life insurance is that it creates the estate that you want even before your investments reach your goals.
That is a great question! I am often asked this question, and I give the same answer each time - there is a lot of confusion between investments, and life insurance. A good financial plan has two parts, protection, and income builders. Your investments, things like stocks, bonds, annuities, money markets, IRA's, etc. are hopefully building your income. Things like insurance and your emergency savings account are protections against unexpected or expected losses ( hospital bills, accidents, death, etc.). A life insurance policy is therefore not truly an investment, as it only returns when you pass, and therefore is of no value to you, unless it was purchased to offset estate taxes. There are policies out there that are hyped as income building, but if you read the fine print, there are a lot of things that can keep that from happening. ( I do not sell any of them, for that exact reason. I prefer that you keep your money safe.) Life insurance is an investment in the financial life of those you leave behind, and in your peace of mind. I hope that helps, thanks for asking!
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Permanent cash value life insurance has four policies you should consider: Indexed universal life with access to domestic and foreign indices, Variable universal life with access to separate sub accounts featuring equities and bonds investments, current assumption universal life and participating whole life, which are interest rate credited.