Learn to win the game of life insurance! Six simple words can help you better understand why life insurance is so important to you and your family.
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I’m Byron Udell, Founder & CEO of AccuQuote.
And today, I want to share a secret with you. Life insurance companies are praying that you don’t learn about the little known, but painfully obvious, secret, of how to WIN the game of life insurance. The fact is, most people LOSE the game, and the life insurance companies need to keep it this way.
The secret to winning the game of life insurance is actually very easy if you know how. And it’s gonna sound simple and obvious. It can be summarized in just SIX words. Here it is: DIE WITH YOUR POLICY IN FORCE.
The odds of death, in case you don’t know, are one out of ONE. So I’m pretty sure you can handle THAT. So why is it, that so many people DON’T win the game? Why do so many people LOSE the game of life insurance? They lose because their policy lapses BEFORE they die.
Now I said earlier that “The Secret” can work with any kind of life insurance. Of course, from the examples I just gave, you can see that you can also LOSE the game with any kind of life insurance. But does it work for Term insurance? Yes, it can! But in order for it to work for Term insurance you’d have to do something you might not want to do. You’d have to die before you’re supposed to, and dying young is obviously not a great plan
So what about permanent insurance? It costs more than term, but it DOES have a level premium for the rest of your life.
So, what’s the rate of return on a permanent policy..at death, at life expectancy? Well, that depends on when you buy it, what your health is, and when you die. So let’s look at an example
I bought a policy recently at…age 55. $1,000,000 of coverage at a price of just over $10,000 a year.
Assuming I live to age 85, I will have made 30 payments of $10,000, for a total of $300,000. My family WILL receive $1,000,000 tax-free—for a gain of $700,000. That’s an after-tax rate of return of over 7%, and the pre-tax equivalent rate of return, at least for me, is well over 11%, and it’s a conservative, fully guaranteed contract, issued by a multi-billion dollar, A+ rated financial institution that’s been around for well over 100 years.
Well, in case you weren’t listening, they DON’T make money on those policies. The people who buy—and DROP—their policies PRIOR to dying are the ones that subsidize the returns for people who are smart enough to DIE WITH THEIR POLICIES IN FORCE. Look at it like this: the losers pay the winners, and the house (the insurance company) takes a small cut.
Here’s a question I get asked a lot: Why do so many wealthy people buy large amounts of life insurance when they clearly, or at least ostensibly, don’t need it?
The answer is simple: Wealthy people are usually pretty good at math. They’ve crunched the numbers and figured out that if they just make sure to hold onto their policy until they die, the rate of return on their premiums, at death, will be higher than ANY OTHER safe, conservative investment they could make.
Let’s face it, every investment advisor or money manager on the planet ALWAYS recommends diversification. In short, that means not putting all your eggs in one basket.
Your portfolio may be diversified to protect against a whole raft of risks, but many of which will never come to pass. Remember though, death is a risk…and unlike the others, death is a certainty. Doesn’t it make sense to diversify your portfolio against the possibility that you might die early? I call this TIME diversification. And guess what Get Motivated! They don’t teach this in Business School! When I bring up TIME diversification with Money Managers their jaw drops and a light goes on.
At AccuQuote, life insurance is what we do. We live, eat, breath, and sleep life insurance. I’ve been on the radio and on TV for over two decades talking about how important it is, and I’m regularly called upon by the media, including the Wall Street Journal, USA Today, CNBC, The New York Times, and Kiplinger’s Magazine, to comment on life insurance industry issues.
The choice is yours. If you are going to own life insurance, you’re either going to WIN the game, or you’re going to LOSE the game. We WANT our customers to WIN. We’ll show you how to win, and give you simple ways to make that happen. We have access to dozens of top rated insurance companies that you know and trust.
As always, it will be up to YOU as to whether you decide to take our advice.