For generations a debate has raged on over whether it’s best to buy whole life insurance or to buy term life insurance and “invest the difference”. Proponents of each method are adamant in their positions and both offer sound reasoning in their answers. But, for anyone to tell you which is the best for you without knowing anything about you is tantamount to someone telling you which road to take without knowing where you are going.
Until recently, many retirees have been able to rely upon the three-legged stool of retirement income sources: A defined benefit pension plan that guarantees a lifetime income, their own savings, and Social Security.
When universal life insurance debuted in 1982, it quickly became a popular alternative to whole life insurance policies which had been losing favor due to its low yields, high premiums and nontransparent structure. In the high interest rate environment of the 80’s, consumers were looking for competitive rates on their money and more flexibility in the way they could structure their life insurance policies.
At its core, diversification is deliberate uncertainty recognizing that it is difficult to know with particular subset of an asset class, or sector is likely to outperform another. Broad diversification, done effectively, seeks to capture the returns of different types of investments over time but with less volatility at any one time. Diversification done right should produce long term returns that outperform portfolios that are too heavily weighted in any one security, sector, or asset class.
You’ve spent hours figuring out your life insurance needs, researching products and speaking with agents. You’ve been provided with several premium quotes, and now, you’re scratching your head wondering why they’re so different from one another. Your thoughts then turn to the more penetrating issue of how premiums are calculated and life insurance costs in general, a question few people really want to contemplate but would love to have answered.
Many people deal with credit card debt all of their lives with most of them giving little or no thought to what happens with their debt after they die. The fact that nearly 60% die without a will is a strong indication that they’ve given absolutely no thought to it. As a consequence, those that survive the debt holder are often left to deal with a myriad of issues that can be time-consuming and unpleasant.
Many investors, especially those still reeling from the 2008 – 2011 stock market roller coaster ride, have developed a low tolerance for volatility. As a result they have moved a significant portion of their investments into bonds or other fixed yield vehicles.
Although we are in the business of building wealth for our clients, we are always on the lookout for those “pearls of wisdom” from the ultra-rich that might bring some elucidation to those who wonder why they’re not.
Once the need for life insurance is determined, the discussion almost invariably turns to the choice of term life insurance versus whole life or permanent insurance. Any comparison of the two, however, is like considering apples and oranges with each satisfying very specific needs, preferences and priorities.
If you’re over the age of 62 and in need of some extra cash flow in your retirement, you may be considering a reverse mortgage. Borrowing money from your home equity might sound like a good idea, but is it actually a wise move financially? Here are some things to consider when making the decision to take out a reverse mortgage on your home.