Before the current views expressed by the Suze Ormans and Dave Ramseys of the world come and tell you what a ripoff whole life and universal life policies are, maybe it’s time to confirm what the are saying. Are they really correct? Do they really have ALL the facts?
Did you know you can double dip invest with these same life insurance vehicles and pay less taxes?
Here is a case presented in favor of Double Dip Investing.
If you happen to be someone who likes to invest, doing it through a whole life policy or universal life policy offers more perks.
You can grow the cash inside your insurance policy tax sheltered and invest at the exact same time.
Just borrow the money out of your policy and reinvest it.
An even stronger case can be made for double dipping with a strong whole life policy.
Whole Life policies, especially the mutual ones, are historically the safest financial vehicles in the world.
Any interest you are charged for borrowing policy funds is tax deductible against gains you make from the other investment.
Here’s the bonus. Most of the interest you were charged for taking a policy loan comes back to you as part of your annual dividend. (Dividends are not guaranteed until after they are declared each year.)
As a participating Whole Life policy owner you get the company profits. That’s why you are charged interest in the first place. If you don’t borrow the money, the insurance company is going to charge someone else interest to use the money and make a profit.
There are plenty of great advisors that can assist you with these types of policies.
So is the financial advice “Buy term and invest the difference” really that good? The public often ends up getting a smaller part of the story.
Maybe you see that there are other parts too.