Permanent Life Insurance

When it comes to your investments, many of the talking heads out there seem to have an opinion on everything. But for some strange reason, they are against any type of investment that doesn’t make them money. Well that seems strange?

Yet still, with all the bias, many people see these radio and TV show hosts as experts and not as entertainers. The real truth is, you shouldn’t take anyone’s word for it…not me, not a website, not a radio host. That being said let’s take a look at what we believe some of the best characteristics of permanent life insurance are that you may not know, and then let us offer you some ways to dig deeper into your investments and learn for yourself the pros and cons of this option.

What is Permanent Life Insurance?

Permanent life insurance is a life insurance policy that builds a permanent cash value. This means cash accumulates in the permanent insurance policy and will also earn an interest rate from year to year. As time passes, more cash will accumulate, meaning more growth inside the policy. This is why permanent life insurance can be viewed as a savings or an investment tool. It has some very interesting tax benefits that you may not be aware of, as well as some other great benefits as well.

What can I do with my Permanent Life Insurance Cash Value?

You always have access to your cash value. By definition, cash value is the amount of money you can always surrender if you decide to walk away from the life insurance policy. This means you are never under any obligation based on age, health, or any other factor. You always have the right to walk away from the account with no extra IRS penalties (there are no penalties like a 401k has). This is why it becomes one of our best alternative investments.

You can also always take a loan from the life insurance company based on how much money has accumulated in your life insurance cash value. You are not required to be approved at all for this loan because it is backed by your money. You then pay this money back to the life insurance company at your own pace. Each insurance company will vary with their terms and conditions, so it’s important to choose an insurance company that will have the most borrower benefits. In this way you can take money out of your life insurance policy when you still want to keep the policy open, and because it is your money backing these dollars, it is in your best interest to pay this money back.

What benefits does Permanent Life Insurance have?

Permanent life insurance has some very valuable benefits that many people are unaware of. It will grow with no taxes, it provides a tax advantaged retirement, it has accessibility, liquidity, provides insurance, and guarantees that you will never lose money. This is what makes it such a dependable place. It offers a steady rate of return on your money, but also gives you access to use your money to make purchases–whatever they may be. This way your money is always compounding. When you are using it, and when you aren’t.

So, when comparing it to other investments for our retirement savings, it becomes a much safer choice. You will never lose principle or growth, and permanent life insurance policies have had a 20 year average of 6 percent. On top of this, you can always borrow the money out if you find another investment that is going to produce a higher rate of return. And on top of this, not to get too confusing, but you will gain another tax write off if you use the money for investments or business expenses. This is why cash value life insurance is one of the primary tools of real estate investors and business owners.

What are the negative aspects of permanent life insurance?

There is no perfect investment. Permanent life insurance is not perfect. If you can’t save money consistently, if you don’t have the responsibility to pay back the loans you take out, if you are trying to produce income just to survive, life insurance will not solve these problems. In fact, it will not be a benefit to you because life insurance as an investment is a long term strategy, and those who understand it know that it needs to be a long term type process to gain all the benefits. However, compared to other investments, the benefits far outweigh the negative aspects. It may be the one of the best if not the best stock, bond, mutual fund, or 401k alternatives.

How can I learn more about starting a cash value permanent life insurance policy?

We are here to educate. We have provided on our site videos, free books, blog posts, and podcasts to help educate the investor on these types of policies. You can signup for our free Infinite Banking (cash value life insurance) toolkit to get ahold of some great books on investing and life insurance. Or, you are always welcome to contact us to get involved in our free training courses that we offer. Either way our website offers many different tools to help you understand these concepts in depth.

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By Josh | Follow Josh on Twitter