It’s Time To Think Outside The Box – Part 2

Have you wondered why your 401(k) or investment account has not done what you had hoped, and why so many seem to be experiencing the same anxiety as you?  Much of this has to do with “volatility” within the markets, and more. 

 In our previous post, we addressed the difficulty and nature of the market environment over recent history.  We suggested that it was, and is, time to think outside the box. Here, we will address an alternative.

Life Insurance (that is, “Permanent Life Insurance”) is not all created equal. There are various flavors of Universal Life, and more than one type of Whole Life as well.

Now, before you walk away, consider that there is a section of the tax code, Section 7702, that addresses the design and use (benefits, for us) of life insurance. We can use life insurance for growth-oriented savings, as well as a death benefit. This should appeal to those not interested in the volatile and difficult nature of the stock market. 

Whole Life Insurance should, at least, be considered as an alternative “non-correlated” asset class in your investment portfolio.  This would serve to modify volatility and enhance growth.

In creating a savings and retirement vehicle, we use Whole Life Insurance of a specific structure. (We do not use Universal Life of any sort; ask us why…).

The “enhanced” policies we use can provide the following benefits:

1) Guaranteed, consistent and continual growth of cash value, regardless of market swings

2) Access to cash without regard to age, employment status, or planned use

3) No negative effect on qualifying for College Financial Aid

and these “Living” Tax Advantages: 

4) Tax-deferred / tax-free cash growth

5) Non-taxable Retirement savings withdrawals under current laws

6) Unlike IRA withdrawals, will not cause potential increase in taxes of Social Security benefits! 

and, of course,

7) Increasing financial (Tax-Free) Legacy for Beneficiaries

 Additionally, many of these policies can now be mated to Long-Term Care riders, resulting in policies with great optionality and flexibility.

 We start with a traditional savings vehicle, Whole Life insurance. These policies are devoid of direct stock or bond market sensitivity, but are growth-oriented.  These policies have become more sophisticated over the years, and represent an opportunity for those willing to use an alternative to what has become conventional. We believe stock market volatility is damaging; consistency is more reasonable for most. And why not with guarantees?

We have a lot to talk about…agreed?

For previous posts, go to:

About L N Himel

Site creator and author has well over 30 years experience in the world of Finance at both the institutional and personal levels. As is often true, his successes, but also the pain of the author's mistakes, have resulted in insights that you, the reader, might find helpful in your efforts to avoid pitfalls and poor results. Associated with Himel Financial Services, at
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