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Another Case For Whole Life Insurance

That facts are that for the vast majority of the population, you have less than a 0.1{566ca8c28ab9c0766b2d4dea465df3e3626e459289038dda6d8d916d382fb86d} chance of dying in your early years, i.e. under 40 or so.

So, in that case you do not really NEED life insurance.

But, the problem comes, when you are at the point in your life when you actually need, or at least want it, like when you’re 60, you will more than likely face challenges in obtaining it.

You may have a mortgage, kids in college, and are probably looking to retire, and a spouse that may have lost her earning power.

In this case, you’ll be in a serious situation, without life insurance.

But, now, the insurance companies will “see you coming” (as they say) when you ask for insurance, and if you have high blood pressure, diabetes setting in, or any of those things that older people get, you can probably forget about even being able to qualify for ANY insurance at all at that point.

So, in that case what do you do?

You keep working, holding your TERM insurance at work, knowing that as soon as you retire, you’re TERM insurance will expire.

Ok, so you take that risk, or you take from your IRA/401k to fund your insurance requirements. Oh but wait, your 401k is worth $2M, and you think, “Ok that’s a lot of money, I’ll be fine.”

So, now you retire, and you chose to take the risk, and NOT carry your now outrageous term insurance policy, with the thought that, the kids are ‘almost’ grown, the house is ‘almost’ paid off, plus the wife isn’t ‘╦£that’ old, and you have $2M to get you by.

But, then taxes come in on the 401k, your medical costs go up, and you’re golden years don’t seem quite so golden even though you are technically a millionaire.

You keep thinking, “Man, I hope the doctors don’t raise their prices, or the insurance companies raising their deductibles, or I hope that I don’t have something ‘real’ serious like cancer, or the wife either, or else we’ll be ‘tapping’ our 401k principle, and if we do that, we ‘might’ run out of money before we die.” Or, you could start possibly start complaining about the politicians, and how they have changed the rules on you, and wondering what you are going to do about it now.

When you’re 65-70yrs old, those are BAD things to be thinking. Agree?

Plus, in that case, you carried TERM insurance your whole life while working, and paid whatever it cost, because you had young kids, a young beautiful wife, and a new house in a new neighborhood, and you believed you were doing the smart thing.

But, you were actually just paying for your feeling of doing the smart thing, and the insurance companies were LOVING you for it, and telling you that they are “like a good neighbor” and “there when you NEED them”. But, now at age 65 you realize that was just marketing ploys to get your money from you for the last 50 years.

Now, the whole life scenario…

You get the policy for $2M when you’re 20.

It costs you maybe $800/mo.

You’re friends think you’re STUPID. People on the internet think you’re STUPID. You’re coworkers think you’ve lost your mind to not take the company 401k plan. You’re insurance broker LOVES you because he’s getting huge commissions, but he thinks you’re a SUCKER for getting it, and you’re buddies are busy blowing their money on beer, cars and women, and you’re home ‘sucking it up’ knowing that ‘someday’ it will be better for you.

Anyway, you pay $800/mo, which seems like a lot, but the reality is, it isn’t, it’s just something you have to budget for, plus you can get a smaller policy.

Anyway, you pay that $800/mo for 7-10 years… depending on your policy, the riders, and the insurance company.

Then you NEVER pay for life insurance again.

So, now, you’re policy has cash value, and that cash in the policy starts to earn ‘interest.’

At about the 7-10 year mark, the cash in the policy will earn enough in interest to pay the $800/mo…

So, now, YOU are 27-30 yr old, and are ‘technically’ a millionaire, as you have an asset that is worth $2M (actually a lot more), that you never have to pay for again, and will be with you for the rest of your life.

But, here is where it get’s good.

Suppose, when you’re 30 yrs old, you want to buy a house, or get married, or just be stupid with money??

Well, you have an OUTRAGEOUS amount of money sitting in your insurance policy, that is nothing more than a phone call away… no hassle, no fees, no penalties, no taxes, no nothing, just a phone call, and w/in 3 days, you have your money.

Ok, so you spend your money on a doodad, or a crazy wedding… OK it was yours to spend.

But, suppose you had a hot ‘investment’ that you needed $50k for?

You’re buddies would NEVER be able to accumulate that much money without taking a second mortgage, or a loan of some other type to come up with that money, or they’d get hammered on taking their money out of their 401k, plus their wives would not be happy with them for ‘hurting’ their retirement nest egg on something speculative.

You, on the other hand, call your insurance guy, and get in your investment, no hassle and no fuss.

Now, your investment pays off HUGE, you make 300{566ca8c28ab9c0766b2d4dea465df3e3626e459289038dda6d8d916d382fb86d} on your hot stock pick… Great, you pay yourself back the $50k, and you do whatever with the remaining $150k.

Or, let’s suppose, you’re investment crashes and burns, and you lose it all…

You would then have to start paying back on your premium, for 7-10 more years…

BUT, you’re $2M of death benefit (actually more) would NEVER be in question.

In you’re buddies scenario, they would be affected A LOT WORSE once you project the $50k they took from their 401k out to age 65, or if they had to take a second on their home.

You are in a MUCH better scenario.

Now, you get to age 65, and your buddy has $2M in his 401k and is the guy with the scenario in the first part of this article, and you have about $5M in your whole life insurance policy as death benefit, with about $2M in cash value.

Now, you CASH OUT (if you want, or need) all but $100k of your insurance policy cash value (enough to maintain the premium), and you ENJOY your golden years knowing that you have $1.9M CASH and $3M remaining in life insurance to take care of your family and estate.

what does life insurance cover you for?

At last you can surely say that life insure is a way to secure your and your family’s future. It is a way you can be sure that even after some unfortunate incident your loved ones will be financially secured.

In my opinion, in your early years, there is NOTHING better than whole life insurance, it will beat a company match 401k, all day long.