Thursday, September 3, 2015

Why people are confused about life insurance

Between opinions from only purchase term insurance (which is the most profitable product for insurance companies), to only purchase whole cash value life insurance it is confusing to anyone listening to differing experts opinions.  Bottom line to consider is this:  Whoever offers you advice should have your best interest in mind and in heart, and fully at risk of malpractice for steering you into products that could cost you tangible losses of principal by steering you into mutual funds at risk or variable annuity products that have risk of loss of principal.  Only fixed rate annuities and cash value insurance policies guarantee you that you will not lose any principal and is like creating a bank account for it that is better on a rate of return than a checking or savings account, certificate of deposit, or other cash asset.  If you only rely on market growth and die early, your family is screwed.  You need to cover all your bases with 
portfolio diversification.

Every downturn in the market that experts cite always came back base the statement  on long term historical gains and losses and assume you would never cash out of the market (because it would be stupid to pull out of the market in their opinion).  Do they really have your best interest at heart here?   Aren't they assuming that the risk of loss of your principal is acceptable to you if you need to cash out of the market for some reason prematurely.   Everyone's risk tolerance is not the same, and the perceived risk of loss of principal can be stressful to anyone to decide.  Don't let greed or fear dictate your decision making or thinking.
Diversify and understand risk.  Talk to a professionally licensed insurance and annuity agent that is legally bound to look out for your best interest in determining suitability of risk.  The managed fund brokers/dealers will make you think that accepting some level of risk to achieve this incredibly better gain is far smarter than just leaving principal in a cash value life insurance plan or fixed rate annuity contract, or certificate of deposit.  But it is your money.  Understand the risk and your levels of risk tolerance to feel good about what you are doing with your money.  Call 301-892-0207 for assistance in selecting a life insurance or annuity agent that I would trust in your state.