Issues with Investing in Life Insurance
There are various issues surrounding any form of investment, with those related to life insurance seemingly concerned with fees charged by brokers or financial advisors. This leads to many investors asking questions related to the comparative benefits of investing or not investing in life insurance.
Among a variety of consideration is that a universal life policy is incorporated into an investment plan, which generally is purchased by the consumer from an agent, with resultant commission paid. A matter of contention is that after the deduction of this commission and any other related fees, the sum dedicated to the investment segment is relatively small when compared to the premium paid.
It should be taken into consideration regarding investing or not investing in universal life insurance that it is not a plan primarily designed to develop wealth. Before making any decision it would be wise to determine any penalties related to policy surrender fees. Among the various opinions expressed relating to a universal policy is that realistically there is only one reason for maintaining it.
Should your health be in a condition whereby you cannot be insured, you still require life insurance. Another criterion related to investing or not investing in this type of policy, is the provision of an option whereby the benefits on death increase during the policy term. This is contrary to the term life policy conditions. It is also a means of helping to pay estate taxes.
The selection of a financial advisor relating to investing or not investing in insurance or any other product is questionable and due precautions should be taken. This is aggravated by the uncertainties of stock and bond markets and their ever changing scenarios. Any financial advisor, especially self imposed, who state they can forecast the state of financial markets should be avoided.
With the volatility and uncertainties prevailing in the world economies today it is difficult to forecast on a yearly basis, never mind on a daily one! A recognized concept is after making your decision regarding investing or not investing, consider a diversified combination of cash, stocks and bonds that meet your financial ambitions with specific risk and time stipulations.