Permanent Life Insurance as a Savings Vehicle

Confused about life insurance?
Confused about life insurance?

“Misfortune pursues the sinner, but prosperity is the reward of the righteous. 22 A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous. 23 A poor man’s field may produce abundant food, but injustice sweeps it away.” (Proverbs 13:21-23)

Life insurance is a severely misunderstood and much maligned product. Wall Street hates these products since Wall Street didn’t create them and doesn’t assess fees on them. Most people have little to no correct understanding of what a Whole Life policy does and how it can best be used to your benefit. For that matter, even many life insurance home office people and agents have very little understanding of their products, instead believing what they hear in the media. Of course, there are prices that must be paid in order to enjoy these benefits. Utilized properly, life insurance can become one of the most powerful centerpieces to your wealth building and stewardship strategies…while you’re alive!

We’ve spoken previously about the importance and power of a life insurance death benefit as part of our discussion of the Roots of your Fruitful Tree. You can brush up on those here:

  1. Life Insurance
  2. Whole Life: What kind of Company?
  3. Do you really need Life Insurance?
  4. Living Value of your Death Benefit
  5. How to enjoy your money and still give it away

In these discussions we discussed the different types of life insurance and won’t rehash the different types of permanent life insurance here, but would be happy to discuss any questions that you have. The Roots of your Fruitful Tree are focused on protection and so our focus there was on term insurance.

Most people should have a mixture of both term and whole life insurance. The reason for this is that whole life provides a tremendous amount of value, as we’ll discuss in the next many posts, but it has a higher cost. Term insurance has only a couple value propositions, but they are important. Term allows you to insure your full Human Life Value at a low cost and thus you are both insured in the short term and able to convert this policy to Whole Life as time goes on.

Now that we’re building a strong foundation for the Trunk of your Fruitful Tree, we’ll focus on permanent Whole Life insurance. We’re going to look at the following aspects of whole life insurance:

  1. How are Life Insurance tax benefits similar and different from IRA’s/401k’s?
  2. How does Life Insurance work?
  3. Premiums and Overfunding
  4. Differences in Accessibility between Life Insurance and IRA’s
  5. Multiple Benefits of Whole Life Insurance
  6. But aren’t you sacrificing the big returns of the stock market?
  7. A Real Whole Life Policy’s Performance
  8. What do Banks buy? (BOLI)
  9. Life Insurance sets free all your other investments
  10. How to be your own banker with Life Insurance
  11. Your Family Bank
  12. Your Storehouse

Along the way, we’re also going to tell “Ben’s Story” – a tale of how Whole Life has worked in the life a fictitious, but realistic character. His is a fictional story we’re going to use to put a real-life spin on all the good and bad that can possibly happen to one person and show how having a whole life policy as a base for his financial endeavors works for him. We hope you’ll enjoy Ben’s story and also have a better contextual understanding of how whole life insurance can be used in your life. Please understand that this is an oversimplified story meant to highlight the benefits of these policies. The chapters of Ben’s story correspond to the above headings and will look something like this:

  1. Ben’s Story of Whole Life in Action in his life
  2. Ben wanted to own something!
  3. Ben doesn’t have any extra money, how’s he going to fund his Whole life policy?
  4. Ben needs a new car, but he’s got Whole Life insurance
  5. Tragedy strikes Ben, but he owns a Whole Life Insurance Policy
  6. Ben the Investor
  7. Ben goes into business
  8. Ben made decisions like a banker without even knowing it
  9. Ben’s Whole Life Policy gave Freedom!
  10. Ben the Banker
  11. Ben loves his family
  12. Ben’s Storehouse

This is Part 1 in a series on Whole Life Insurance. This is the introduction. As we post them, we will link to each post with each of the above 24 titles being a link to that post (only after they’re posted).

Photo credit: B Tal

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