Do You Know About the Deceitful Savings Account of a Whole Life Policy?

Have you ever heard of someone state that there is a savings account attached to a whole life insurance policy?  How would you feel about a savings account where the bank keeps the savings if something were to happen to you?

Did you know that a majority of people who purchase whole life insurance policies believe that if something were to happen to them that they would receive both the "savings" and the death benefit?

If a majority of people believe this, is it the insurance companies at fault, the insurance agents or the people purchasing the policies?  This is very difficult to answer.  My suggestion is that it is all of the above.  People need to take responsibility and learn for themselves about the contracts they are signing.  On the other hand, most people are so busy with their day to day lives that others must work hard to make sure they have ethical business practices.

In some cases, the death benefit is increasing over time to make it appear that the "savings" are being attached to the death benefit.  However, that increased death benefit just means that there is an underlying increase in the cost of insurance.  Is it ethical to call the cash value a "savings" plan?

This post was reposted from http://finlit.biz/life-insurance/do-you-know-about-the-deceitful-savings-account-of-a-whole-life-policy/, originally written on February 9th, 2013.

Cash Value Life Insurance Versus Reversed Mortgages

Have you ever heard that cash value life insurance is great because you will be able to live a "tax free" retirement by taking a loan from your policy?  The first question you need to ask is whether a loan is a liability or an asset and whether you prefer to add liabilities or assets to your portfolio.

You may also compare the option of taking a loan from a cash value life insurance policy with other vehicles which allow you to take loans.

You may also take loans against any asset that you have, such as a retirement account or home.  If you decide to do this, be careful as you may have stipulations in place that determine how many loans you may take against the asset, the details for paying back the loan including who gets the interest and how much percentage of the asset's value you may loan against.

If you take a loan against your home through a reversed mortgage, you may be able to take equity out of your home.  You will be required to pay for home insurance and property taxes to have access to this loan.  This is very similar to having to pay for life insurance to have access to the loan of a cash value life insurance policy.

Which would you do?  Would you rather be forced to pay for the costs related to your home or the costs related to the increasing cost of life insurance?

Read more at www.allrmc.com.

This post was reposted from http://finlit.biz/retirement-2/cash-value-life-insurance-versus-reversed-mortgages/, originally written on February 6th, 2013.