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Times are tough for cautious investors seeking guaranteed returns.
People approaching retirement in the next 10 to 15 years don?t enjoy the luxury of a long time horizon required to correct earlier investing mistakes or to recover losses.
Who could have imagined these record low interest rates persisting for so long?
So what can you make on a ?conventional? safe investment today?? The answer is very little.
Your bank savings account pays less than .25 basis points, your chequing account balance yields 0%, GICs pay 1-2% and require you to lock it in for long periods (see current measly returns) while cash in the cookie jar earns zero %. Bonds pay a bit more but carry the risk of interest rates going up and bond values dropping.
Many Canadians are losing sleep worrying about risky investments while ignoring a guaranteed investment with effective yields of 8% pre-tax and zero market risk.
Life insurance has been around for over 100 years and is still the Rodney Dangerfield of financial instruments. It is a mature product that gets no respect from the vast majority of people who simply avoid it and think it?s just another expense.? They know what it is, but no one has explained what it can do.
In addition to safety, security and above-market returns, life insurance in your investment portfolio usually carries a bonus bundle that can include free life insurance and favourable tax treatment for estate planning purposes.
Here?s an article I just wrote on the subject for the July issue of the TaxLetter?. It explains why life insurance is a unique financial instrument, not an expense, and how it should be used as an integral component of an investment portfolio. Read ?An asset, not an expense? HERE
No two situations are alike. Please contact us for additional information and a fuller explanation of what it can do for you and your family.
Stay healthy
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Source: http://markhalpernblog.com/life-insurance-is-the-rodney-dangerfield-of-investing/
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