Life Insurance as an Investment

[Shorty K]

So I hear there are life insurance policies which work as an investment. You put money in, they pay you tax free dividends, you can reinvest the dividends and you can pull out what you put in at any time tax free. Any of my 6 cert nikkas heard of this

 

[NoReligion]

Sounds like a “Whole Life” insurance policy, higher premiums than a “Term” policy.

 

[Rawtid]

Yeah a whole life policy. I've been taught not to combine life insurance with investments. Also, the monthly payments are higher and your beneficiaries do not get the cash value/investment, just the value of the policy. It doesn't seem worth the additional costs.

 

[⠀X ⠀]

Anybody have life insurance on their parents, and pay the premiums on it? Been thinking about doing that...

 

[Rawtid]

Anybody have life insurance on their parents, and pay the premiums on it? Been thinking about doing that...

Not this set up, but my mom has policies on her kids and grandkids that she pays. It’s not a whole lot, like $10k. She also has her own policy.

You can set it up for your parents though.

 

[Kinguno]

Primerica works like that but it's too volatile

 

[⠀X ⠀]

Not this set up, but my mom has policies on her kids and grandkids that she pays. It’s not a whole lot, like $10k. She also has her own policy.

You can set it up for your parents though.

Cool. I'm gonna look into it. I wanna do like 200k on each of them. I doubt they have any life insurance, and I'd hate to get hit with a funeral bill.

 

[ThaBronxBully]

 

[Perfectson]

I was just about to come in and say life insurance is not an investment (though they try to tie investment to it).

I'm actually have been in the field and worked with actuaries - life insurance is INSURANCE

 

[Swirv]

Yeah a whole life policy. I've been taught not to combine life insurance with investments. Also, the monthly payments are higher and your beneficiaries do not get the cash value/investment, just the value of the policy. It doesn't seem worth the additional costs.

I think it is worth it as an investment vehicle. The way to win is taking loans out against the cash value.

You can repay the loans, or default (I don’t recommend) and it comes out of the death benefit paid to your beneficiaries.

The only thing is that the loan reduces the net cash value and limits appreciation since there’s less money to invest.

shyt is tax free. And the interest rate on loans is lower than any other instruments on the market.

 

[88m3]

terrible option

 

[QuintessentialBM]

Because of the financial choices my father made with life insurance (and other investment vehicles), I'm semi-retired; I quit my very stressful and physical taxing manufacturing job. I'm either about to start a business or go back to school with that payout money. If I do right with the money, I'll definitely never have to work a manual labor job again, and if I properly cash flow the money, then I'll be 100% retired. My car was already paid off and I inherited a brand new, top of the line GMC Sierra truck, in addition to my parents paid-off home and the ability to pay off my condo. I haven't put the money into action, but I'm officially debt-free.

Many black people do not prepare for the future, then complain about financial struggles, or straight up being broke. Having life insurance is a great insurance policy for preventing complete financial collapse in the event a breadwinner dies, leaving the surviving family to pay off debt AND it can be the principle method to build wealth.