Life Insurance as an Income Producing Asset with the Power of Leverage


We’ve talked a lot about using life insurance as an income producing asset. Many people stumble a bit when they first attempt to wrap their head around the notion of using “insurance” either as a place to save money or as an asset from which they can generate income. 

I raised an eyebrow or two when first presented with the idea. Today’s discussion is not an introduction to the concept of using life insurance as an income source, but rather a somewhat advanced look at why it can work so well.

Keep Reading

Sequence of Returns Risk and Indexed Universal Life Insurance

We’ve addressed the subject of sequence of returns risk in the past. We’ve even discussed it on the new Insurance Pro Blog Podcast. This subject has become a hot topic in more recent years as financial advisors now struggle to build retirement income plans for their clients and face the problem that few, if any, training programs touch. Why isn't their more specific training for advisors on this issue?  Speculating about that would be an interesting topic for another day.

Today, I want to talk about how indexed universal life insurance is affected by sequence of returns risk especially in the context of using a policy to generate retirement income.

Keep Reading

Same Stock Market, Two Different Decades

We know the stock market is volatile and we know that stock market losses happen. Traditional advice is that losses can be recouped with time so any investor whose stomach twists into knots when he or she opens a 401(k) statement need not worry if he or she can wait out the correction.

For the most part, there is nothing wrong with this advice, but what happens when one doesn’t have time to wait out the correction?

Keep Reading

How Much Do You REALLY Need to Generate Your Retirement Income

How much Money do I need to Retire

A lot of Americans are struck ill thinking about how much money they need to retire. Several trade associations within the financial services industry have noted the lack of preparation both consumers and financial advisors et. al. have as it relates to turning your heard earned and saved dollars into retirement income. This problem has sparked a massive revamping of academic instruction among the industry’s best-known degree/certificate granting institutions.

This has accomplished some success in at least changing the conversation as it relates to retirement planning, but there’s still plenty of room for additional awareness and today I want to drive home a significantly important point about what it will really take to achieve comfortable retirement income.

Keep Reading

CNBC Thinks Life Insurance Works for Retirement Income?

CNBC Thinks Life Insurance Works for Retirement Income

Yeah you read that right.  In a recent story over at CNBC, How to Invest for a (Mostly) Tax-Free Retirement life insurance is actually given a little a tip of the hat!

Clearly, the world is coming to an end.  The mainstream financial media usually takes great pleasure in beating up on whole life insurance and all types of cash value life insurance for that matter.  What's more…they typically take a few swipes at life insurance agents just for good measure.

Keep Reading

037 Beer and Cheez-its

Beer and Cheez-its

(Complete Show Notes Below)


In the 37th episode of the Financial Procast:

Your 401k Statement Might Soon Tell You What Sort of Income Your Balance will Produce

That's right…a recent statement from the Department of Labor announced an advance notice of a proposed rule change that signaled they are considering a rule that might require your accumulated benefits be expressed as an estimated “lifetime income stream” in addition to the normal account balance. The announcement was made early last week and now has a comment period open for the next 60 days.

Keep Reading

Be careful how you save—Your IRA and 401k may be a trap

Be careful how you save—Your IRA and 401k may be a trap

Since I’m never really one to go with the flow, today I’ll hold true and bludgeon the sacred cow of all financial advice gurus—the IRA and the 401k. It’s not that I’m trying to be controversial or contrary to spite Dave and Suze.

That’s just an added bonus.

I am concerned about the conventional wisdom that says the IRA (both traditional and Roth) and the 401k are the best ways to save for retirement. In fact, these sorts of qualified plans could trap you and really put a squeeze on your retirement plans.

Keep Reading

Use Cash Value Life Insurance to Create Retirement Income

Use Cash Value Life Insurance to Create Retirement Income

Many of the people who reach out to us hope to use cash value life insurance to create retirement income. They’ve heard about this possibility, maybe read a book or two that talked about it, and, in some cases, even talked to a “certified” advisor.

But, they’re still scratching their heads as to how it all works, and they’re often convinced they haven’t seen the best representation of the strategy.

In the last few years particularly, this strategy has gained significant momentum, and it’s not surprising with the sagging long-term rates of fixed income investment vehicles (treasury bonds, corporate bonds, and CDs) and the volatility of the stock market since 2008.

Keep Reading