If you’ve been watching or reading about the global stock markets sliding yesterday and continuing today, you’re probably worried. And rightly so. No one wants to return to the financial chaos that plagued us just a few short years ago.
According to The New York Times this morning, “Investors continued to pull funds away from stocks—including in emerging markets despite their solidly growing economies—and shifted instead into the perceived safety of assets like U.S. Treasury bonds, German bunds and precious metals.”
That sentence can be summed up in just one word: safety. People are looking for a safe place to put their money where it can still grow. And in a climate like this, there is very little safety. There is an exception, however. Owners of whole life insurance have seen their cash values rise when the value of many of their other financial assets have slipped, and this will continue to be the case.
Plus, the cash values in these policies, which accumulate on a tax-deferred basis, can be used in the future for any purpose you wish. 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.
In addition, the life insurance policy continues to do exactly what it was designed to—serve as the foundation of a family’s financial security. The death benefit will remain the same through the ups and downs of the economy. Now that’s something to count on.
Not so much, according to
a survey from Guardian Life. The survey showed that consumers under 40 are opting for whole life insurance over other types of policies due to their desire to be financially secure.
The survey showed that 35 percent of the respondents under 40 also preferred to pay their premiums as fast as possible versus the traditional lifetime payment schedule. The No. 1 motivating factor (72 percent for those under 40) for the purchase of whole life was the desire to protect their families. The No. 2 reason for all age groups was whole life’s guaranteed cash value.
Those under 40 also said they had considered mutual funds, CDs, stocks and other life products before opting for the whole life, with 54 percent seeing whole life as a reliable retirement income supplement.
Perhaps now is the right time for you to review your insurance and financial portfolio to include
whole life insurance as one of your choices for safety, security and guarantees.
Do you recall that great classic song by the Fifth Dimension, Up, Up and Away?
Well, not many folks are singing about how good things are on the economic front. Fear of rising taxes, a continued recession, lingering unemployment and low or anemic economic growth have many people scratching their heads and wondering how best to position themselves financially.
A just released LIMRA report indicates that sales of permanent life insurance policies for the first three quarters of this year are up 15% over the same period last year. Why are people taking a renewed interest in permanent life insurance? I see several reasons:
1. People are looking for guarantees. What’s better than a 3% or 4% interest rate guarantee of your cash value? What other options offer this type of guarantee?
2. The tax advantages of life insurance include the tax-free buildup of cash values while the policy is in force and the tax-free nature of most death benefits.
3. You have guaranteed access to those cash values. If you need a loan, will your banker always be there? Your cash value will.
4. Consider the stable nature of the life insurance industry in an otherwise shaky financial world.
5. You gain peace of mind knowing your loved ones are protected and will be provided with the exact amount of financial help you have identified that they need, in the event of your premature death. What a legacy to leave!
Click here to find out more about permanent as well as term life insurance, and which may be right for you. I hope you’ll take time to find out about the unique and powerful nature of life insurance. It will help you feel like your financial health is up, up and away!
Last week The Wall Street Journal ran an article called “Juicing Your Life Insurance” about “indexed” universal life insurance policies. A first read of the article might lead a consumer to decide, Wow are these things complicated! I couldn’t agree more. However, the life insurance industry developed these policies to respond to two main critiques that other types of permanent insurance are often tagged with.
With whole life insurance some consumers say, “I like the guarantee, but can’t I earn a bit more of return when the market is really up?” With variable life insurance, consumers sometime say, “I love the upside when the market skyrockets, but I can’t stand the wild market swings.” So, like any good listener, many insurance companies developed this so-called indexed life insurance product, which allows you upside participation and downside protection. The bottom line: you are able to participate in market gains, while ensuring that you don’t lose those gains should the market go south.
It is confusing … you bet. Wise consumers will consider all the options available, get good counsel from their insurance advisor and then make an informed decision. I personally own all five major types of life insurance: term, universal, whole, variable and indexed. The way I see it, the mix is diversification itself. That mix is unique to my personal and business needs, so everyone should make a decision based on their personal circumstances. Research and understanding is the key to long-term success with indexed life products. For many, the product provides a much-needed combination of upside and downside participation. It’s not for everybody, but it might be for you. Talk to your advisor to find out more.
It’s easy to think that “it” won’t happen to you. And it’s even easier to think that when you are young. That’s why many young couples spend much more time choosing wedding invitations or their honeymoon destination than they do protecting the new family unit they’re creating.
Life insurance is certainly not top on most young couple’s minds. It’s something that they’ll think about, perhaps, when they start a family or move into their first house. But time doesn’t always wait for our “someday” plans to come to fruition. It’s best to put those plans into action before time decides it has other plans.
Melissa Wandall understands this better than most young women. She and her husband, Mark, were expecting a baby within weeks. Feeling tired after a day’s work, Melissa decided to stay home and put her feet up instead of joining her husband and brother for dinner out. As she kissed her husband good-bye before he left, she had no idea it was the last time she would see him.
As he was returning home that night, the car Mark was in was broadsided by a driver who ran a red light. He died less than a week after celebrating their first wedding anniversary and just 19 days before the birth of their daughter, Madison Grace.
While Mark is no longer there to spend time with his vibrant wife and watch his beautiful daughter grow up, he did make sure that they would be taken care of. As a young life insurance agent, he had made sure that they had proper amounts of life insurance in place in case anything were to happen.
That life insurance has allowed Melissa to remain in the family home, take time off from her career so she can be a full-time mom, and put money into a college fund for Madison Grace. The insurance has also given Melissa the opportunity to keep Mark’s spirit alive through two important causes that she has started in his name. (You can watch her story here.)
Through LIFE’s realLIFEstories program, Melissa has graciously shared this story with the public so that others, especially those who are young and growing their families, can understand the importance of having proper amounts of life insurance, now.It’s time for LIFE to gather stories like Melissa’s for the 2010 realLIFEstories Client Service Awards.
And while the realLIFEstories application is for agents and advisors to fill out, I encourage anyone who has been touched by the benefit of insurance, life, health, disability or long-term care, to let their agent know that it’s time to share your story with America.
The stories that are chosen will be featured in a September 2010 issue of Newsweek, which reaches nearly 13 million Americans. In addition, you and your agent (each with a guest) will receive an all-expenses-paid trip to Seattle, Wash., this Sept. 11 to 14 to attend the award ceremony. The deadline for entries is Wednesday, March 31. I encourage you to take this opportunity to reach out and touch others lives with your story.
