Is Now The Ideal Time To Buy Whole Life Insurance?
To repeat an old adage- the best time to buy life insurance was 20 years ago. The second best time is now. The time value of money coupled with the power of compounding means that age is always the most powerful predictor of policy performance over the long term. However, there are other factors at play at a Macro level that play a role. Insurance companies rely on safe assets to generate yield on their capital, and therefore, are greatly affected by interest rates. The last few decades have seen historically low interest rates, and declining dividend rates by insurance companies. We are now at a turning point in this environment, and are starting to see companies either hold, or slightly increase their annual dividend crediting rates. While we certainly can't predict the future, we postulate that now is likely to be a very good time to own whole life insurance. “At the end of the year, the Life Insurance company makes an accounting of the experience of that year of the death claims paid, the earnings on premiums collected, and the expenses of running the company. A dividend is declared which is actually a return to the policy owner of surplus premium that as collected. Hence, it is not an earning and, therefore, is not taxable. When that dividend is then used to buy additional paid-up insurance at cost, then the result is a continuous compounding of an ever-increasing base.” -R. Nelson Nash, Becoming Your Own Banker- Unlock the Infinite Banking Concept. Connect with Doug MacKenze: Website: Control Capital Solutions Email: firstname.lastname@example.org Connect with john Fox Ward: Website: Nash Cashflow - The Nash CashFlow Group Email: John@nashcashflow.com