Introduction to Life Insurance Revolution
Life Insurance is often perceived as staid and unchanging, although the industry has continually responded creatively to meet the buying public's changing needs. It wasn't that long ago that intelligent insurance would have been a contradiction in terms. Insurance was not intelligent; it was reactive — more about protection than progressive action.
Well, let me tell you the good news: Life insurance has been reborn. Today, life insurance is being used in ways people have never conceived before. It became dynamic, proactive, and powerful. It is an essential part of wealth transfer planning, executive benefits planning, and insurance portfolios. It is a vehicle for generating personal wealth and fueling business growth, a means to an end, not the end itself.
Let me give you the five main reasons why to include cash-value life insurance into your investment portfolio:
1) It is much safer than investing in the stock market. Why? Three reasons:
a) The insurance companies are levied to maintain a General Account Portfolio Yield or a GAP yield. The fund represents the insurance company's legal reserves, which is the money safely tucked into very conservative investments—like AAA bonds.
b) The insurance companies practice REINSURANCE to transfer their risk portfolios to other parties and diversify the risk.
c) Life Insurance companies use HEDGING to prevent large losses when the stock market is adverse.
Think about it--through devastating world wars, financial recessions, depressions, sweeping epidemics, earthquakes and fires, inflation and deflation, the life insurance industry has protected people to a degree unmatched by any financial institution in the history of the world. Today the life insurance industry provides more than a trillion dollars of death protection to American consumers. Our team at Tesla Wealth will teach you the financial strategies to build wealth both under the wing of insurance companies and the Wall St.
2) Cash-value life insurance is the newest non-correlated asset class, with the power to help protect and promote wealth. Correlation, in finance and investment circles, is a statistic that measures the degree to which two financial instruments move in relation to each other.
If two assets are considered non-correlated, one stock's price movement has no relation to the other's price movement. For example, the price movement of precious metals, say, gold, likely will not directly relate to the price of, say, Facebook shares. Therefore, gold and Facebook stock are considered non-correlated assets.
Most people don't think of their investment assets as correlated or non-correlated; in fact, many would argue that diversification among asset classes of stock is adequate diversification. Yet, the reality is that too many investor portfolios are highly correlated, so when stocks and bonds fall, they get hit hard.
That's where cash-value life insurance comes into play. Limited pay whole life or indexed universal life insurance products are widely considered one of the safest and most effective non-correlated investment vehicles for any size investor.
3) Cash-value life insurance is one of the most tax-advantageous investment vehicles around.
Some of its notable tax advantages include:
Why is this important? Well, in short, it is not necessarily how much money you have that is important—it is how much you get to keep that matters.
4) Zero is the Hero. By offering solutions that include Indexed Universal Life insurance in your investing strategy, your funds are protected by a zero percent guaranteed minimum or 0% floor. The floor represents the downward protection, meaning if the market is negative and losing, that 0% floor protects your cash value in your life insurance policy until the market improves. The most one policy can lose in any given year are the policy fees deductions.
5) It's not only the asset but the one with high liquidity.
A key feature here is a Cash Value Build-up, which accumulates on a tax-deferred basis, just like assets in most retirement and tuition savings plans.
The cash value can be used in the future for any purpose you wish. If you like, you can borrow cash value for a down payment on a home to help pay for your children's education or to provide income for your retirement.
When you borrow money from a permanent insurance policy, you're using the policy's cash value as collateral, and the borrowing rates tend to be relatively low.
And unlike loans from most financial institutions, the loan is not dependent on credit checks or other restrictions.
So those were my five reasons to consider including cash value life insurance in your investment portfolio. I hope you found some of the info valuable.
We at Tesla Wealth Management take pride in the fact that we have helped hundreds of families protect their dreams and future finances with life insurance, so give us a try and Build Your Legacy With Tesla Wealth Management. Please find us at our Tesla Wealth LinkedIn Page, or our Tesla Wealth FB Page.
