Over Funding Your Life Insurance To Build Legacy
Sooo, this week on Money Mondays we had our boss babe with the golden smile Natalie Reid from State Farm Insurance. We had fun sharing our passion for helping people find ways to make their money work for them.
We posed a few questions only you can answer. Even if you haven’t seen the episode yet, you can answer them now:
- Do you have life insurance?
- If you do, what does your policy do for you?
- Is your life insurance tied to your employment? If it is, when are you going to invest into one that’s not?
How To Use Life Insurance for Legacy Building
Natalie shared a story about a prudent grandmother who recently got a 10K Whole Life Limited Pay term policy with State Farm for her two month old granddaughter. In 20 years, her granddaughter will have money—$260,000 to be exact—to invest in her education, a business or home if she chooses. We love hearing these kinds of stories.
We offered some great tips:
- Everyone should have at least $1 million in life insurance.
- The cash value of life insurance is protected from creditors, liens, taxation, etc.
- Life insurance is a good alternative to money market savings accounts (those have interest you have to pay taxes on) while you learn how to invest in bitcoin or the stock market. Your money earns tax-free interest in a life insurance policy.
Term vs. Permanent Life Insurance
We talked about the difference between term and permanent life insurance. Most term life insurance has no cash value if you outlive the policy which many people do. Natalie dropped a bomb when she shared that only 2 out of 100 people ever get a payout from term policies. There are return of premium policies that will pay you back the premium you’ve paid into the policy if you outlive it.
Permanent life insurance offers you a death benefit and has a cash value. There are two types of permanent life insurance – whole and universal. Whole life insurance offers coverage for the full lifetime of the insured, and the savings can grow at a guaranteed rate. Universal life insurance also has a savings component in addition to a death benefit and it has flexible premiums that can earn you money based on market performance.
Flip That Stimulus Check
When we switched from Purse Empowerment TV to our IG Live we talked about how those of you that are getting the stimulus check might flip it. If you’re gainfully employed and don’t need the money to sustain you, then look at these options:
- Eliminate or reduce your debt
- Put it in savings
- Invest in bitcoin
- Buy a life insurance policy
I read somewhere that there are people who invested their first stimulus payment into bitcoin and a year later it’s earned them $10,000. That is nothing to frown at. In fact, it made us smile. We hope the information we shared makes you smile and feel empowered to make some sound financial decisions when you do watch it.
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