I recently posted this to the LIFE Foundation’s blog and thought ASI readers might enjoy reading it, too.
Guarantees in an Insecure World
Not many people are interested in plain vanilla, when triple-fudge bomb is available. Let me explain. The promise of big—even huge—returns on investments during the halcyon days of the market drew many people’s eyes off a financial-planning fundamental: life insurance. Who wanted to talk about death and 3 or 4 percent returns on the cash accumulation feature in a permanent life insurance policy when the promise of double-digit returns in the market lay glittering on the horizon?
Then the market tanked, taking with it 20 or 30 percent of many people’s portfolios—sometimes even more. That has lead to a renewed interest in the “plain vanilla” of the financial planning world. September is Life Insurance Awareness Month, the perfect time to explore why proper amounts of life insurance should be the foundation of your personal and business financial plan.
People are facing an entrenched “recession,” collapsing job security, depleted retirement accounts and an unstable investment environment. The beauty of life insurance is that it offers guarantees in a world that suddenly seems void of them. Life insurance provides guaranteed death benefits that keep your family secure in the world they know and the lifestyle they are used to, should the worst happen to you.
Used as a planning tool for small-business owners or partners, those same guaranteed death benefits can help keep your business from dying along with you. What other kind of financial product allows you to pay a such a small amount to ultimately receive such a large, guaranteed benefit?
It’s also good to keep in mind that permanent life insurance policies offer you a guaranteed accumulation feature. As the cash value of the policy grows, it offers you another, not often talked about, feature: the ability to take out a loan against that amount—guaranteed. No bank or savings and loan is going to offer you that promise. What a blessing that guaranteed loan might be if a family or business emergency came along and you needed to tap that money, no questions asked.
It seems to me that you owe it your family and business to take a look at how the guarantees of life insurance can secure their world. Wouldn’t it be nice to know that you had a life insurance policy that promised to pay when your loved ones or business partners needed it most?
If you don’t currently own life insurance, or feel that you don’t have enough to meet your personal and business needs, I encourage you to begin by using LIFE’s free, online Life Insurance Needs Calculator to get a better idea of what amount of life insurance you might need. Then contact your agent or advisor to help you get the coverage you need, or if you need to find an advisor, use the Agent Locator here.
