We like life insurance and more specifically we like cash value life insurance. Doesn’t really matter which type of cash value life insurance it is, whole life insurance universal life insurance truth is both accomplish some magnificently great things.
But neither Brantley nor I started our careers with the appreciation we now have for life insurance. No, instead we were both very excited to be working in the “securities” industry and were much happier to hold investment licenses than we were to hold insurance licenses.
What caused us to make the shift away from practices that were securities focused and instead more insurance focused?
While I don’t personally consider cash value life insurance a complicated subject, I admit that when the prospect of using life insurance as an income or savings tool first came to my attention my first thought was “how is that even possible?”
I mean, life insurance is insurance. It’s an expense just like car insurance. You pay a premium and that premium goes to the insurance company. How can paying a premium result in my having any money? No thanks, I’ll talk about that sexy mutual fund of the year that Morningstar is gushing over with their five star rating.
Oh the embarrassing ignorance.
Incapable (actually unwillingly, let’s be honest) of understanding how life insurance really works and can be leveraged as a phenomenal retirement tool or savings vehicle, I embarked on my career as a financial
advisor professional consultant thingy and only really accomplished confusing the hell out of everyone I spoke to about what exactly I did.
I could talk about investment products. But most people didn’t care because I always had to tell them that investment performance was always a guess and maybe the fund or investment strategy that I liked would work, but then again maybe not.
And then 2008 roared along and one of the nastiest market fallouts in modern time took place.
2008 was evil. And trying to sell securities was brutal. People were scared and they didn’t want to talk about investing in the stock market. In fact the stock market itself didn’t even matter. If it even remotely wreaked of Wall St. people turned their nose up and walked away, and for good reason.
So, with traditional investments out the window, and needing something to focus on and talk to prospective clients about, I did what any good capitalist does and sought out another option.
I did have this life insurance thing I knew about, but that was difficult. People didn’t understand it and, while it appeared to work, no one likes talking about life insurance…right?
I began focusing heavily on life insurance (more whole life insurance in the beginning because I worked for a career mutual insurance company and I learned early on that universal life insurance was a dirty word…liars) and talking about it with people.
I ignored the resistance and confusion and pressed on to spread the word of what these products did.
Then I made a fascinating discovery regarding policy blending that I pieced together myself (no one bothered to show me, probably because no one knew how).
I quickly found myself in a position where I became the go to guy regarding cash value life insurance and how it could be employed as complement to ones portfolio and used as a retirement or savings strategy. And people (potential clients) where coming to me to learn what I knew and buy life insurance from me.
We’ve covered the multitude of benefits that cash value life insurance brings to the table. And there’s a ton of other content on the Insurance Pro Blog that goes even deeper into additional benefits. But the one thing that both whole life insurance and indexed universal life insurance bring to the table that no other assets I’ve found accomplishes nearly as well is a strong return given the risk exposure that remains extremely liquid.
Nothing offers the safety of principal with as much liquidity and can yield as well as cash value life insurance, nothing.
It’s not just about the market neutrality (thought it’s strong I assure you), and it’s certainly not about the likely return (stocks will almost surely win long term). I’ve said before that personal finance is more about the over all strategy than anything else, and cash value life insurance is the best weapon at your side in your mission through your own personal financial life.
It brings so many options and so many benefits to the table it’s hard not to become fanatical about it—if you can understand it. And I can assure you understanding it can take some mental processing power. But, like most things, the effort to develop the understanding is well worth the work for the rewards of understanding and owning properly implemented cash value life insurance are substantial.
Brandon launched the Insurance Pro Blog in July of 2011 as a project to de-mystify the life insurance industry. Brandon was born in Northern New England, and he currently calls VT home. He attended Syracuse University and graduated with a triple major in Economics, Public Administration, and Political Science.
IPB 107: When Interest Rates Go Up, Bonds Go Down. What Does It Mean for my Life Insurance?
IPB 105: Is Indexed Universal Life Insurance Worth it even if the Interest Rate Assumptions are Wrong?
IPB 104: You Can Just Buy Bonds: One of the Reasons Not to Buy Whole Life Insurance
IPB 103: Why Does the Life Insurance Industry Suck at Marketing?