Brian Livesay, San Diego Retirement Guardian | Life Insurance As A Portfolio Asset

Brian Livesay, San Diego Retirement Guardian said, “Life insurance is a valuable asset in any portfolio. An investment portfolio should be diversified. Life insurance can be another layer of diversification with some unique benefits other portfolio options cannot offer.”

Life insurance is often thought of as a way of protecting an individual’s family from financial ruin. This alone makes life insurance an asset but it really is not seen as a portfolio asset. Portfolio assets are investments that accumulate in value over time. Stocks, bonds, mutual funds, and real estate are the investments that immediately come to mind. Permanent life insurance falls into this category as well.

Permanent life insurance consists of Whole Life and Universal Life policies. These policies are owned by the insured and last until age 100 or 120 depending on the company, unlike a term policy which is only in effect for a designated period of time. Whole Life and Universal Life both have the potential to build cash value over time. This is a result of adding more money than is necessary to cover the cost of insurance on a yearly basis. The extra money gets credited interest annually which helps to further build the cash accumulation inside the policy. The interest earned is usually a fixed rate stated in the policy or the interest earned is based upon the performance of the stock index. Both methods are fairly conservative investments since the cash accumulation in the policy is protected from market losses. The indexed strategy is not directly invested in the stock market so losses are avoided.

Life insurance also has unique advantages that make it a worthy portfolio asset. Life insurance has tax advantages. The death benefit passes tax free to the insured’s heirs. This is a significant benefit for the heir since the money will not be added to their earned income requiring more income tax to be paid thus causing a loss of a portion of the death benefit to taxation. Loans can be taken from the cash value in the policy which can create income for the insured that also avoids taxation. New life insurance policies offer living benefits that pay the insured a percentage of the death benefit of the policy if the insured has a qualifying critical illness, cannot perform two activities of daily living, or is diagnosed as terminally ill. This benefit is also a tax free benefit giving the insured additional funds in a time of need.

For more information, visit: “Brian Livesay: The Retirement Guardian – San Diego Who Is Page” in the San Diego Professional Journal.

You may contact Brian Livesay – The Retirement Guardian at his office.

Capital Solutions Inc.
1761 Hotel Circle S. Ste 360
San Diego, CA 92108
Call (866) 726-0725 / (619) 281-8377
Or, visit his website at: