Insurance companies are not only one of the most reliable institutions for preserving investments; they also provide Americans with insurance coverage in case of unforeseen circumstances. It is a unique functionality for the purposes of long-term pension provision and insurance coverage of people’s lives and health.
Endowment insurance
The program combines the functions of insurance and a bank deposit: you insure your life for a certain amount, which you then pay in installments over the period specified in the contract - usually from five years. These premiums are accrued at a fixed percentage of return (usually 2-4%). If an insured event occurs within the prescribed period (for example, death, disability or loss of ability to work), the company will pay the rest of premiums; if not, you will take the accumulated money with small interest.
Investment insurance
It works in the same way as endowment, only the insurer gets the opportunity to invest your money and, if successful, will pay you a portion of the profits. This profit, however, is not guaranteed: if the investment does not bring return, you will not receive anything either.
Benefits of life insurance as an investment
Insurance coverage: in the event of the insured’s death, the beneficiaries will receive insurance benefit.
Tax benefits: in the United States, tax benefits are provided on insurance premiums and return on investments under the insurance policy.
Plan flexibility: Many investment insurance products provide flexibility in investment and fund management allowing the plan to be adapted to changing financial circumstances and markets.
Source: https://www.wealthmanagement.com/insurance/life-insurance-investment-retirement
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