After this week’s stock market roller coaster ride, I’ve been reminded of the steady returns produced by cash value life insurance policies. Depending on the contract, internal rates of return can be around 5%; at a 35% tax bracket, that would be a taxable equivalent of 7.75%. Over the long haul!
“Owning permanent insurance will always be in vogue,” says Steven J. Spector, Partner in Charge, Insurance Services for Sikich, LLP. “First and foremost, it is protection that will pay a death benefit if a person lives to or past average life expectancy. The frosting on the cake is the cash value accumulation, which serves as a valuable living asset and is not affected by market volatility.”
The fable of the Tortoise and the Hare teaches us slow and steady wins the race. I’m pretty sure the Tortoise is a client of Mr. Spector!