Safe Money Strategy

In real life – Life Insurance is a great investment and those who might say otherwise are not relating to real life.

Since everyone dies, we know exactly what the end result of a life insurance program will be. We just don’t know however, WHEN any individual will die so we don’t know how financially efficient the program will be. In other words, the younger or sooner someone may pass away the financially more efficient the payoff from life insurance.

HYPOTHETICAL EXAMPLES

  • Providing capital to maintain or enhance the income of a surviving spouse.
  • Providing liquidity to pay estate taxes and other costs without requiring estate assets to be liquidated.
  • Providing access to a death benefit, while alive, to provide the additional income needed to pay for long-term convalescent care.
  • Providing specific tax-free “gifts” to grandchildren for college education or other capital needs as they enter adulthood.
  • Creating a tax-efficient plan to save for retirement and receive tax free “Roth like” income without the limits of IRS or ERISA options.
  • Protecting a business from the unexpected death of a key employee.
  • Allowing a business to carve out, reward, bonus and keep executives with solutions to achieve additional compensation, protection and retirement income.

Many folks who sell life insurance or long term care for a living will concentrate on the “need” and cost of care statistics. What many critics of insurance and the financial press focus on, is how expensive insurance is it, and do you really “neeeed” it vs. what they offer and know better? While on the other hand, those of us who deal with life insurance in the context of our clients overall financial and retirement planning clearly have a distinct perspective when we consider the investment aspect and benefits if needed. We can see the value in our clients’ portfolio and to their family when a portion of their assets are “invested” in a life insurance policy. But just like any other investment, it is impossible to tell what the final rate-of-return or outcome will be because we do not know when the insured will die or need care.

Now consider the risks of Critical, and Chronic Illness. Just think of the rate of return on your money if you had invested in insurance protection and were to have a significant health challenge, like a stroke, dementia, heart attack or kidney failure? Things happen, and you may need some serious money to cover the added costs for proper care, rehabilitation, experimental treatments, etc. Our goal is to help make sure your family can be care coordinators rather than caregivers. We do not want you to become a burden on your family, friends or the government.

The critics of life insurance mostly just lack understanding of what it does and how it works and the added emotional benefits of owning it. They miss a fundamental concept in financial planning; that the only time one can judge success or failure is when it is time to spend the money. Until then, all investing and insurance is a work in process. The significant difference between “investing” in life insurance versus other options is that with life insurance you always know “what” the end result will be, it’s only a matter of “when”. With other investments you will likely not know the “what” and the “when”. That’s why having some of both potentially increases predictability of results, reduces volatility along the way and for many people, reduces stress, allowing us to hopefully enjoy life a little longer.

At Westland Wealth we understand the value of committing a portion of a clients’ portfolio to insurance that potentially will create a large liquid asset when needed, no matter when that may be. Your heirs will thank you.