In today’s economy we are hearing story after story of retirement plans and stock portfolios at amazingly reduced levels. Families have seen their retirement plans fall by 70%. The corporations also looking to reduce expenses are eliminating the match on retirement plans, and in some cases completely eliminating employee benefit plans. Most families do not have a way to recover or absorb this value reduction.
We have seen the home prices, or home equity reduce in some areas by 25-30%, but the mortgage balance remaining at 100% of its previous balance. If it is possible for the families to refinance at lower rates, then some cash flow is improved. Woe are those who used home equity loans to invest and watch both values be pummelled.
There is a new found strength in a fundamental product that is as old as dirt. Whole life insurance is rushing to the rescue of many in our country who are being educated on all the foundational powers that it brings to one’s life. This product offers many features that are guaranteed, such as guaranteed cash value and increase, guaranteed level premiums, guaranteed face amounts at death, and non-forfieture provisions that allow for the usability of these dollars today and later.
Thanks to the demise of our current economy, the guaranteed 3-5% returns on cash values with tax advantages and opportunities for dividends that don’t create 1099 income is a very powerful position. The potential guarantee of continuing of premiums in the event of a disability is also available for some. If banks had that feature on their accounts there would be a line around the block. There are also a great number of tax advantages with these products.
I have learned that the whole life insurance product is pretty doggone great when it stands alone, but I have learned more about how to integrate this product into a process that makes all the other financial decisions we have to make work even better. By protecting the assets we have from eroding factors like taxes, disability, lawsuit, death, inflation, and yes, market volatility, we can create an enormous amount of wealth without having to take an enormous amount of risk in any area.
I have learned how to create recovery plans that allow families to position their assets in such away as to be able to absorb a loss of 30-50% of their retirement plan and not miss a beat in their income. Options in life are something that we are all after, not limiting choices due to factors that we do not control.
I have also learned how families can be in the highest tax bracket but pay the least amount of tax because of the functionality of the tax rules. The life insurance actually creates some liquidity features of other assets that just were not there before due to the costs, penalties, or taxes. This is some amazing stuff when properly applied.
When making these kinds of decisions for your life it is extremely important to work with advisors who are very educated in the aforementioned areas. It is also important to coordinate the information you have from your advisors through a filtering process that can be relied on by facts and simulations, not opinions. Every person should have their own unique strategy, not one size fits all, so work with someone who will listen and understand your situation.
As a life insurance agent I could not be happier about the strengths of this product or the strategies that can be built around it, but you need a full analysis and explanation of your options before making any purchasing decisions. It is my intent to help as many families in America make a positive decision that is well informed and is unique to their family. I have the best job in the world helping my clients reach their dreams financially. Let me know if you have an interest in starting this path of discovery for you.
If you would like more info on how these strategies might help you, or would like to create your own financial simulators, then reply to this message or send me an email at trent4tnr@aim.com.
