One of the benefits of a life insurance policy is portfolio diversification. Life insurance companies offer several unique plans that allow earn and save up. Indexed universal life is one of such products. Index life insurance is an investment in the largest and most stable stock exchange indices.
“One of the product’s features is that the indices combine the securities of many companies. Even in the most difficult times, there will always be companies in the index that show growth,” explained Mike Raines, co-owner of the Raines Insurance Group.
Use of borrowed funds
People buy life insurance because it allows them to use other assets without fear of eventually losing them. For example, in the event of death, the insurance company will close all liabilities to creditors.
“Life insurance is useful if you make a lot of money; it is useful if you have problems with taxes; it is useful if you die young; it is useful if you live too long or if you are seriously ill. If you don't invest well, then your back-up plan is life insurance,” says Naoshad Pochkhanawala, a financial planner at Amiko Benefits.
Equity life insurance is a convenient product for savings. To use unit-linked, a client concludes an agreement with an insurance company and pays an initial fee. After buying a policy, the money is credited to a personal account with an insurance company. Further, the insured investor gets access to stock market assets - stocks, bonds, foreign exchange market, precious metals, mutual funds and others through an intermediary, without opening a brokerage account.
“The investor can manage the portfolio himself by choosing assets to receive investment return. The insurance company, in its turn, invests his money in investment funds. The contributions received under the agreement are converted into ownership units, otherwise units or shares of the selected funds. The capital of the insurance company’s client grows over time. Such policies are acquired for the long term, from ten years or more", emphasizes Mark Williams, CEO of Brokers International.
Peace of mind
“If the economy is turbulent, as it is now, with rising inflation and higher interest rates, the customers get anxious and life insurance comes into play again. The policy saves clients' assets and helps them feel more secure,” says David E. Appel, MDRT member, managing partner of Appel Insurance Advisors.
Life insurance provides for protection of property interests of the insured person related to their life and death. Life insurance is usually associated with the long-term interests of the insured, due to the fact that life is viewed as a long-term condition, and the event of death is seen as unpredictable and distant. “It is up to each individual to decide whether a life insurance policy is a rational investment. Inflation can put pressure on income making it difficult for people to consider these investments, but with new digital tools it's very easy to apply online, and get options tailored to a client's unique needs within minutes,” concluded Jim Reboin, Chief Revenue Officer of Afficiency, a New York-based digital life insurance distributor.
Photos are from open sources.