What Kind of Life Insurance should you select to fund your Life Insurance Retirement Plan?
You have several to choose from, ranked in order from lowest risk to highest risk:
- Whole Life
- Universal Life
- Index Life
- Variable Life
There’s no rule that says you have to pick only one type of life insurance policy. Any person that says one policy type is always better than any other is an amateur and should be avoided like the plague. A prudent investor diversifies their portfolio, and that same wisdom applies to using life insurance as a retirement savings supplement.
Because of the reverse dollar-cost-averaging risk associated with Variable Universal Life insurance, we tend to favor the traditional life insurance products for the majority of conservative investors and savers, especially individuals and owners of closely held corporations.
Of the three traditional life insurance types, the one with the most growth potential, with Principal Protection, is Index Life Insurance. Among all types of life insurance, Index Life Insurance is the most modern, and most versions of Index Universal Life Insurance are designed specifically for funding a Life Insurance Retirement Plan. That said, there are certain situations where a traditional Interest Sensitive Universal Life policy, or a dividend paying Whole Life policy may be suitable and appropriate, depending upon the fact situation.
We are continually monitoring the Life Insurance marketplace, and prepare studies like the one below to determine which policy is suitable for our clients:
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