Lot’s of over complication going on out there – this 1 minute and 30 second video will break down the 3 key things to look for in a High Cash Value Life Insurance Policy.
Hey. Thanks for stopping by this post. I am starting this out odd because, well, I’m a bit tired.
The reason. This is the third time I am writing this post.
I started out trying to show how to use life insurance with debts, but it got way too complicated.
And every situation is so much different. But here is what I gleaned from this.
Also, understand that I am talking about high interest debt here, credit cards, etc. If you have low interest debt such as a home or a car, it needs to be treated completely different (you can watch my video here on how to pay off those debts).
I was in a bit of an online argument (don’t worry I’m ok) the other day with a guy on some random website comments. These are unproductive, for the most part, and Dan Thompson would be telling me it’s a waste of time.
To continue, we were about done with it all when he attempted to seal the deal with his little emoticon. We were talking about whole life insurance and he said, “I’ve been getting 11% on my money in my retirement fund. Good luck getting that in your whole life insurance policy :).”
Smiley face slam. What could I say?
Many people are unaware they have options when it comes to creating a high cash value life insurance policy. And, to be honest, I wasn’t able to offer these options for a long time, and most people in this business still do not have this ability.
So, being able to give you options has been something we are pretty proud.
But enough chatter, what are the options?
Simply put, we can choose between having more long term growth policy, or, we can choose to have a little less growth over the long term, with a lot more cash value available up front.
Let’s look at the high early option first, and then compare the two.
“But what is the cost?” This is question that I often get before I’ve sat down with someone and showed them an actual insurance illustration. It’s a difficult question to answer without looking at numbers and understanding the actual dividends of a life insurance company.
On top of this, because we are putting money in to gain a return on our investment, it makes the conversation of cost an even much more difficult subject to tackle.
However, let’s look at some numbers from an actual insurance illustration and see if we can’t analyze cost better.
An emergency savings fund is a must have. That being said, many times people lose out on a whole lot of cash value because they don’t look at their money the right way. They don’t put a future value on their money.
How does this apply to an emergency savings fund? Well, you might be surprised how much money you could be earning over your lifetime.
Now, the purpose of an emergency savings fund is clear–you want to have a stack of easily accessible money to use when and if you need it. If you do use the money for an emergency, you want to build it back up again.
Have you ever had someone insult what you believe in? You might get offended or even want to retaliate. Well when it comes to life insurance, there’s so many people that don’t get it, that you can’t help but laugh.
Like the guy that called it “trash value life insurance” the other day. I laughed out loud… it’s actually one of the more creative ones I’ve heard.
The truth is most people just don’t quite get how high cash value life insurance works. This is exactly why I recorded this quick video… to clarify 3 of the most common misconceptions:
- “It’s Expensive”
- “The Returns Are Really Bad”
- “You Have To Pay Premiums Your Whole Life”
After a long and arduous battle with a lengthy blog post idea on this topic, I realized that a podcast was going to be much easier.
And now, for your less boring audio educational enjoyment…
Want a real challenge? Pick a growth mutual fund today that will return 12% per year return for the next 30 years
Tough you say?
Okay, how about 20 years?
Still seem impossible?
Well then how about 10 years?
Come on… how hard could it be?
Let me tell you about Jim.
Jim is 55, and Jim is pretty mad.
I just got done reading an email from him and, he was in a fury, a bit humorous, but the angry overtones were definitely there. He’s mad at himself and the world that he didn’t understand the concept of compound interest and how to make purchases years ago.
Warning: The concept I’m about to teach you may change your life (or make you angry).
You see, Jim, like everyone else, had to buy cars to live. He’s older, so he has been buying cars for the last 25 years. And he is just now realizing how much money he has lost because he didn’t put compounding interest on his side. He’s been paying cash because he was told “it was the best thing to do.”
But, the question is, what do the wealthy do differently?