Life Insurance Take A Last Gasp And Count The Savings!
More than half of all US households are living paycheck to paycheck with no emergency savings.The majority of Americans can't afford a $24,000 or even a $2,000 emergency. They will have to borrow money from the credit card company, take out a payday loan, or pawn something just to get by if they become unemployed and without insurance.
That's why it is vital for every American who can qualify for life insurance coverage to opt in and save their families the effort and stress of financial grief in the event they pass away prematurely.
But if you're one of the millions of Americans who don't own a life insurance policy because you've been told that it costs too much money or you think life insurance is too complicated to understand. If you don't invest in a high-yield investment account or even contribute a single dollar to your 401(k) plan, then you could be missing out on thousands of dollars every year, perhaps more.
According to the findings from MONEY Magazine's 11th Annual Retirement Confidence Survey: 55% of Americans say they don't have enough savings for an emergency and 38% have no retirement savings at all -all while 61% say they are financially prepared for retirement.
Millions of Americans may be living paycheck to paycheck, but they're still not saving enough and they're not planning for retirement. The good news is that the first step to financial peace and security in retirement is buying a life insurance policy.
Life insurance is one of the best investments you can make for your family - more than any other form of financial planning, it's designed to help you either pay off debts or fund your retirement. And now, you can buy that policy at a dramatically reduced cost thanks to a little known option called guaranteed universal life insurance (GULI).
What is guaranteed universal life insurance? Simple. It's a type of term life insurance that builds cash value while earning interest and has a guaranteed rate of return. The premium stays the same as long as you own the policy and the investment growth is tax-deferred, similar to an IRA or 401(k) plan. Most importantly, it can provide your family with a financial cushion in the event of an untimely death.
Your family would be eligible for the death benefit if you were to pass away before your term ends and given current interest rates and other economic factors, chances are slim to none that you'll lose money on this type of policy due to high costs.
But wait, there's more.
With a guaranteed universal life policy, you can keep the difference between the amount of your premium and the investment return in a GULI account, which is available to you as a tax-advantaged investment option and grows alongside your policy for years to come unlike an IRA or Individual Retirement Account where money has to be withdrawn or turned over at retirement age.
It's basically a checking account for insurance policies where monies can be invested in dividend-paying stocks, bonds or funds that pay interest. For example, if you invest $78 per month into GULI, your total savings could easily increase by $76 over time.
But wait, there's more!
While GULI is a tax-advantaged account, you can contribute a maximum of $50,000 per year to it. All investments made are after-tax and the return will be reported as income on your tax return. However, if based on current interest rates, the GULI account would likely provide much higher returns than most stocks and mutual funds - especially if you own one of the top 10 dividend-paying companies with a market cap above $5 billion like Apple (AAPL), Google (GOOG), or Costco (COST). You could potentially see more than 10% annual returns every year on your $50,000 investment.
For example, if you held a $50,000 GULI account earning 10% annually, your total savings would be $62,921 after 30 years. That's assuming you don't make any withdrawals or change your premium and death benefit amount. However, that account balance is yours at the end of the term and can be transferred to another policy or retirement account without penalty - it's a win-win!
It would have taken an investment in IBM (IBM) of $39 to equal that same total savings amount because you would have to pay taxes on all income and gains annually. But with GULI, your money stays invested for decades without paying capital gains taxes.
For example, if you wanted to pay off a home mortgage of $250,000 over 30 years with GULI and 10% annual returns, it would take $145,745 if you took out the whole amount. But that would be your after-tax savings account - no taxes are paid on your GULI contributions. You could also opt to put money in a stock portfolio instead of GULI and invest in companies like Apple or eBay (EBAY).
However, you can't take money out or make loans against the policy until it's time to retire. You can't take out any money or loans until you're 60 years old or the death benefit is unrealized. As long as you're alive and ownership of the policy remains in your name, you can keep the policy active with no penalty if you move to another state and make new insurance purchases.
You can also change your beneficiary periodically, as often as every 30 days, during the lifetime of the policy. This allows family members who may not be able to afford GULI benefits themselves or who are younger than 60 when purchasing a policy, to get a life insurance policy at reduced cost (if they qualify for coverage).
When you take advantage of GULI, your family can keep the death benefits as long as they need it. And if they don't need to use it, then they can transfer the money to another policy or retirement account. If you're struggling with debt or saving for retirement, then this type of policy could be the perfect solution for your situation.
For more information about life insurance and how it can help you put more money away for retirement and provide security for your family when a loved one passes away, check out my free ebook: The Ultimate Guide to Life Insurance .
Conclusion
You don't have to live paycheck to paycheck and not plan for retirement. The good news is that there are affordable options out there that will help you save more in your retirement accounts, prep for debt or even provide medical care for your family. Or if you're already retired, then simple steps like paying down debts, cutting costs or removing things from your budget like cable television could put you on the path to financial peace and security in retirement.
The first step to financial peace and security in retirement is buying a life insurance policy. You can take advantage of guaranteed universal life insurance to make your savings grow stronger over time! Just make sure you're properly insured before making important decisions about where money can be safely invested.