In my view, permanent insurance is neglected to the point of criminality. It baffles me why advisors and clients alike are so anti-permanent insurance.
There is no other product or financial tool that can guarantee a return of over 5% at someone’s life expectancy.
There is no other product or financial tool that grows cash, both on a guaranteed and non-guaranteed basis without any taxable implications (Triple Tax-Free Municipal Bonds come close).
It is one of the only a few ways to provide near-instant liquidity at death.
It can be utilized as a personal lender.
It can be utilized as collateral.
It can “equalize” a family inheritance plan to not divide real assets.
The last one I mentioned is one of my favorite planning tools with Life Insurance. It is such an easy concept and it is painfully overlooked.
You probably have family, friends, or clients that fought over a home or business when they and their siblings inherited it. With Life Insurance your clients don’t have to worry about one child wanting to sell the house and the other wanting to keep it. With Life Insurance, you can give your clients the ability to leave a $1,000,000 business to their child that has been in the succession plan and “equalize” the other child that has not. This option works out much better than having the kids split the house or business which will likely lead to animosity.
We have been beaten so hard over the head for so long that Permanent Life Insurance is a cost. We need to retrain ourselves and our clients to realize that it is one of the most flexible assets anyone could have.