How Insurance Investment Works

When it comes to making a solid investment, most people overlook life insurance as a viable option. They still view it as something of a save-it-for-a-rainy-day fund. What they don’t realize, however, is that there’s so much more flexibility in insurance policies today, and that it is a worthy investment option.

by Mabel Marquez, 21 November 2017

An insurance policy can be a solid investment too.

What if you can actually reap and enjoy the benefits of your insurance as an investment component while you are still in the pink of health? What if you don’t have to meet an unfortunate accident—or worse, untimely demise—before you can get the payout from your life insurance? 
It sounds so much better than the traditional model of life insurance policies, doesn’t it? Fortunately, it is an actual option that you can take nowadays. Thanks to insurance policies doubling as an investment portfolio, you not only get to enjoy comprehensive financial protection for you and your family, but you also acquire a lucrative and sound financial investment. 

Invested in Insurance

For most people, investing their money in life insurance feels like wasting it because they won’t be able to use it when they pass anyway. In a sense, it’s like digging a hole in your backyard and regularly putting money in it for savings. The money may be safe, but it doesn’t grow in value nor can it be easily accessed when need be. 
The kind of investment that people want instead is something that they can eventually enjoy for whatever purpose they may deem fit. They want money that is easily accessible, and grows in value over time.

Basically, for insurance policies that double as investment, otherwise known as insurance investment, part of your premiums eventually becomes investments after a certain period. As the value of your premiums grows, so does your investment. While your insurance premium remains to be untouchable and dedicated exclusively to the items listed in your policy coverage, you can dip your hands into your investment funds once in a while. 
This is a great option to have especially if you ever need emergency funds, including additional money for your children’s schooling, your retirement, or even if it’s just for your much deserved vacation. The only condition is that you keep your premiums intact and that you don’t withdraw in excess of your policy’s minimum value. 

Advantages and Benefits

The first thing you should keep in mind is that this kind of setup will only work if you get a permanent policy. There are temporary ones that you only need to pay for a certain amount of time, for example 10 years at a time, after which your policy matures. If you want to maintain the coverage, then you’ll need to renew your policy. This is not only tedious, but also hardly provides any financial advantage for you. 
On the other hand, a permanent policy is maintained for as long as you keep paying for the premium. The longer you maintain it, the higher the returns. And, if you invest in a policy that covers an investment component, you can eventually diversify and repurpose this for other financial ventures. Again, the only condition is that you only access those in excess of your premium’s value so that you don’t forfeit your coverage. 
For many experienced investors, this is a much more lucrative option as opposed to just paying premiums that put your money to sleep, so to speak. With insurance investment, your money remains active and movable without compromising the value of your policy. With sound financial advice, you can further expand and improve your investment portfolio so you can continue accumulating wealth. In this context, the money you pay for your insurance policy premium essentially becomes your capital. 
If you’re looking for a reliable secondary stream of income in the future, insurance investments could be something worth looking into. Don’t just do the mature thing for your future’s financial security; do the mature and smart thing for you.