Just so U can use it as a kind of reverse pension in later years.
2007-06-23 21:50:21 · 9 answers · asked by Anonymous in Business & Finance ➔ Insurance
To my knowledge, taking out an insurance policy on yourself for the purpose of an investment vehicle in your senior years isn't a good idea. The insurance agency often invests the premiums paid into a very low return investment, such as corporate and government bonds. The money doesn't do much but sit around slowing being eaten away by an increasing CPI (Consumer Price Index). So the inflation will have, by the time you're ready to cash in the policy, effectively eroded any earnings made on the investments.
There are myriad investment agencies that you can consult with about your retirement needs. If it's a guaranteed ROI (return on investment) that you wish, you can probably save some money and have more investment options by purchasing bonds through the investment house.
If you have dependents, you should definitely purchase a term life insurance policy. If you're single, you should purchase health insurance if an employer won't sponsor a policy for you.
2007-06-23 22:02:22 · answer #1 · answered by Bruce Almighty 4 · 0⤊ 0⤋
Nope. An insurance policy instead of a savings plan will cost you 90% of your procedes. That's like me saying, for every $100 you give me, I'll give you $10 back!! Great deal, huh??
If the goal is a pension later in life, the best financial tool is a 401K, IRA, savings account, etc.
Set the goals, then find the cheapest products that meet those needs best.
Insurance doesn't do that.
2007-06-24 10:15:42 · answer #2 · answered by Anonymous 7 · 0⤊ 0⤋
Please search for other answers on this forum. From my view point, there are a limited number of circumstances where it makes more sense to do this than investing outside of a life insurance wrapper. Please note that the insurance contract itself often has volatility that should be accounted for when you are looking at your own risk profile (UL, VUL, EIUL) or any dividend payments hinge on the experience of only one company and may be seen as an undiversified position (Whole Life). In either case, changes in the dividend or changes in the mortality and administration charges are separate from company strength.
If you do this in the most effecient manner, you will be intentionally overpaying into it, so use a small portion of those premiums to talk to a fee-only financial planner to get an opinion from someone who isn't trying to sell you something.
2007-06-24 08:16:45 · answer #3 · answered by aaron p 5 · 0⤊ 0⤋
Technically, you can use life insurance as savings. But, as I say, talk to a licensed agent in your state. You need to speak to an agent so he can help you come up with a plan specific to what you need. Period. Any agent on this site who tries to tell you, "Yeah go ahead," or "no, are you nuts?" does not have your best interests in mind. There are so many options you can choose from, that it would be impossible to make a decision for you based on a two sentence question. Speak to a professional in your area and he can help you. Good Luck.
2007-06-24 16:38:25 · answer #4 · answered by JB1977 2 · 0⤊ 0⤋
Yes. Life insurance builds cash value.
2007-06-24 04:58:31 · answer #5 · answered by Classy Granny 7 · 0⤊ 0⤋
No. There are other ways to invest the money that yield greater return. If you don't need the insurance to cover debts for someone who survives you, don't buy it.
2007-06-24 04:54:44 · answer #6 · answered by Mike1942f 7 · 0⤊ 0⤋
Not unless you have others depending on you for support. Insurance was meant to benefit the family. So in my case, no. I have no dependents.
2007-06-24 17:42:25 · answer #7 · answered by filia_san 5 · 0⤊ 0⤋
yes it is a good idea, i have one with the bank and a private one with some other company.so i no my kids are going to be ok if anything happend to me.
2007-06-24 05:02:08 · answer #8 · answered by Angela W 5 · 0⤊ 0⤋