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Be careful of Insurance Agents who only push the “Buy Term, Invest The Difference” strategy. Here’s why....
Before I get into that, let’s explain what “Buy Term, Invest The Difference” actually means when we talk Life Insurance.
Let’s say I buy a 30-Year Term Life Insurance Policy with a death benefit of $1,000,000 and it cost me $70 dollars per month.
If I went out and tried to get a permanent/whole life insurance policy for the same $1,000,000 dollars (which is stupid) it may cost me $300 dollars per month.
Yes, that’s expensive because there’s almost no reason to get a permanent policy with that much death benefit.
Yes, that’s expensive because there’s almost no reason to get a permanent policy with that much death benefit.
Basically what “buy term, invest the difference” means that I pay the $70 bucks for my $1,000,000 dollar term life insurance policy and the difference I would have paid for my permanent policy ($300) ... I invest into the stock market. That would be $230 per month invested.
If the average American is ONE PAYCHECK away from being homeless, that’ll tell you that most people LACK discipline. Odds are, you won’t be putting that difference into a stock each month no matter how many times I tell you to do it.
Don’t believe me? Ask you agent to show you his bank statement of him/her investing the difference each month. I can’t even show you that. Because discipline gets to ALL OF US. Most of these agents are only selling you this strategy to earn commission. Not to help you!
Imagine a doctor prescribing you to medication with understanding why you’re sick. You would run far away. Same thing with insurance. If the financial rep doesn’t ask questions about your current &future goals, discipline level, and etc.. they aren’t trying to help!
Yes, I recommend “Buy Term, Invest The Difference” to SOME clients.
Yes, I recommend buying a mixture ofTerm & Permanent to SOME clients.
But I ONLY recommend when I understand YOU as a client. Not my commissions. Or I would be setting you up for failure.
Yes, I recommend buying a mixture ofTerm & Permanent to SOME clients.
But I ONLY recommend when I understand YOU as a client. Not my commissions. Or I would be setting you up for failure.
Last but not least, make sure you find a financial representative who was educated on how to property structure an Index Universal Life Insurance Policy. One who knows how to structure Term & Permanent policies to work together. And also teaches you to “invest the difference!”
