POLICE Magazine

JUL 2017

Magazine for police and law enforcement

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Page 48 of 60

46 POLICE JULY 2017 W hen you hear "life insurance," what comes to mind? Do you think of the monthly premiums as the "neces- sary evil" nobody wants to pay? Or does it remind you how you should get life insurance, but you still haven't done it? Did you know the right kind of life insurance can be an ef- fective vehicle to protect and grow your savings? Conventional wisdom suggests when it comes to life in- surance, you should buy term. en save or invest the dif- ference that you would have spent on premiums if you'd bought a more expensive whole life policy. Here's why: Most people allow their insurance policies to lapse. Most people also fail to set up a whole life insurance policy correctly or maximize its financial advantages, so their cash value never exceeds the amount paid in premiums. e result is a nega- tive return on their savings. If you follow conventional wisdom, buy term life insur- ance and save the difference in your IRA or 401(k), you have no guarantee. If you incur a loss on that savings, nobody is going to reimburse you. And with term insurance, there is no utility while you're living. e so- lution is simple: Get help selecting the right kind of life insurance, set up your policy correctly, keep it, and use it. If we were going to design the per- fect vehicle to save and protect cash, what would that look like? We'd need to include the following attributes: • Secure returns • Control and liquidity • Easy to manage • Tax-free and inflation-proof • Privacy and protection A number of savings vehicles are strong on some of these, but weak on others. Gold is a great hedge against inflation, but it's not liquid and is subject to capital gains tax. e money in your IRA or 401(k) is easy to manage, but it's subject to seizure in lawsuits, the returns aren't secure, and it may become taxable. Look again at that list of attributes describing the perfect savings vehicle. A properly structured whole life insurance policy through a privately held mutual insurance company offers all of them. SECURE RETURNS With a whole life policy, you can literally purchase a se- cure wealth position for the future. When your policy is issued, you are guaranteed to have a cash value at least as much as the amount quoted at the time the policy is un- derwritten. If you're under age 55, you have the option of a "waiver of premium" rider, which will pay all premiums for you if you become disabled. e solvency record of privately held mutual insurance firms is nearly unblemished. Compare that to banks. Life insurance companies are required by law to guarantee their PHOTO: GETTY IMAGES LIFE INSURANCE AS A SAVINGS VEHICLE By maximizing the advantages of whole life insurance, you can accrue secure capital that you can loan to yourself with no penalty and no tax implications. Cop Finance ADAM DORAN

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