Before I started learning about finance, I always thought about insurance as a money pit. You put money in, the insurance company doesn't pay till you're dead. What a bunch of croc, they pay out when I die? What good is that? I guess if I had a wife and some kids sure it'd be ok for them then, if I love them, but what if I don't like them then what?
Putting just enough money to cover the minimum premiums for an insurance policy is just one method of using life insurance. Life insurance can also be used as sort of a savings account. Money within life insurance grows tax free, and with regular contributions and compound interest the amount within the account could grow to a large amount. If there is more then enough in the life insurance account you can then establish an Insurance Retirement Program (IRP). With this program you basically take money out of your life insurance to spend as you choose when you retire.
Of course you should calculate the proper amount to take out annually so that you don't deplete the whole insurance policy, you still want to have some in there to protect your life. By using this strategy you're not only protecting yourself against the unexpected, you're also saving for your retirement.
This type of strategy isn't for everyone. I met someone a few months ago who wanted insurance, I pitched him the two strategies he could use for life insurance. He responds by saying that he sells business' for a living. He then asks if the life insurance savings strategy I was telling him about could give him the same type of return? Obviously this was a rhetorical question, and he made his point. He only needed insurance as a form of legacy for his family. For those of us who aren't as business savvy, life insurance is a great way to leave a legacy and to save up for retirement.
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