Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Video Transcript: Hello everyone, I'm Steve Savant, syndicated financial columnist and host of the weekly online talk show, Steve Savant's Money: The Name of the Game. I'm answering questions from insurancelibrary.com and today's question is, "Is buying term and investing the difference better than cash value life insurance?" Well, when I'm looking at buying term and investing the difference, what am I investing it in? And is that a risk area? And if I'm looking at permanent insurance, am I looking at guarantees and guaranteed returns? Am I looking at using indexing? Am I looking at risk-based insurance, like variable? When I put those two together, I want to look at both of those plans and to see which one comes out the best.
We have programs that we've developed that will measure, is it better to buy term insurance and invest the difference in whatever product line you want to think of, whether it's mutual funds or ETF's. Or is it better to keep it inside a contract for the tax deferral and the possible tax-free income? You can compare those things and always know which way to go with a simple program that will measure it for you. Well, that's our consumer question for today. If you have any questions, submit them to www.insurancelibrary.com.
Buying term life insurance is the mantra of A.L. Williams. It has been repeated by Primamerica to Dave Ramsey, an old A.L. Williams guy. I believe that everyone's situation is unique and you should purchase the life insurance product that makes the most sense for you and your loved ones. I will answer your question with a US government statistic. Over 50%of the US work force has less than $2,000 in a retirement account and 67% have less than $50,000 saved in a retirement account. If this theory worked, these numbers would not be so high. Reality is the difference between buying whole life or universal life versus term life insurance is typically $50 per month. How many people actually invest the $50 per month into a retirement account? According to Uncle Sam, not many. If you have that discipline to invest the difference then that may be the correct strategy for you. If you lack that discipline, then cash value life insurance is probably your best strategy. There is no such thing as one size fits all. Beware of entertainers giving advise to the masses. Find a trusted advisor that will sit down and map out the best strategy for your unique situation.
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Video Transcript: Hello everyone, I'm Steve Savant, syndicated financial columnist and host of the weekly online talk show, Steve Savant's Money: The Name of the Game. I'm answering questions from insurancelibrary.com and today's question is, "Is buying term and investing the difference better than cash value life insurance?" Well, when I'm looking at buying term and investing the difference, what am I investing it in? And is that a risk area? And if I'm looking at permanent insurance, am I looking at guarantees and guaranteed returns? Am I looking at using indexing? Am I looking at risk-based insurance, like variable? When I put those two together, I want to look at both of those plans and to see which one comes out the best.
We have programs that we've developed that will measure, is it better to buy term insurance and invest the difference in whatever product line you want to think of, whether it's mutual funds or ETF's. Or is it better to keep it inside a contract for the tax deferral and the possible tax-free income? You can compare those things and always know which way to go with a simple program that will measure it for you. Well, that's our consumer question for today. If you have any questions, submit them to www.insurancelibrary.com.