Let’s be honest, when you hear about life insurance the first thing you think about isn’t an investment. And, most life insurance is not meant to be an investment vehicle. However, when structured properly for high cash value growth, a whole life insurance policy can offer us investment benefits that we cannot find anywhere else.
A better way to understand what high cash value insurance offers is by understanding what it is not.
High Cash Value Whole Life Insurance is not…
It is not universal life insurance – Universal life insurance is different from whole life insurance. Whole life insurance offers us steady and predictable growth on our money, it also offers us a place where we can use our own money at little to no cost. Universal life insurance is neither safe, predictable, or cheap which is why we use whole life insurance to build high cash value.
It is not typical whole life insurance – Typical whole life insurance is structured for insurance. All that a typical insurance policy cares about is how much money you will leave behind when you die. High cash value life insurance is structured for cash growth. By maximizing the cash growth we can be competitive with other investments while capitalizing on other benefits life insurance offers.
It is not term life insurance – Term life insurance is purchased for the safety net of if you were to die prematurely. Once again, we are not purchasing these products for the life insurance, but for their ability to growth and secure our wealth. Comparing cash value life insurance to term life insurance is the same as comparing a mutual fund to term life insurance—it doesn’t make sense. When asking if high cash value life insurance is right for you, compare it to other investments you are looking at. It is an investment conversation, not a life insurance one.
High cash value whole life insurance is different from probably any other product you have heard of. Because of the advantages that this product offers us, it has become our main tool for productive long-term investing.