Vivinavi : Los Angeles : (United States) Los Angeles

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• 2022/01/22 (Sat) 12:52
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However, I am somewhat skeptical about life insurance because I strongly remember advice I heard from someone about 10 years ago that life insurance and investments should not be mixed, and that life insurance is not an investment.

＞ ＞ I think you are very right to be skeptical. The use of life insurance savings programs is not a direct investment in the market and can be costly if misunderstood. However, if you understand the structure, life insurance plans can be an advantage as a way to increase your savings, including in terms of taxation.

Whole life insurance has a monthly premium that increases with age and the amount that goes into investments decreases as you get closer to maturity, and after deducting commissions and expenses, the effective annual interest rate is about 1.5-2%, as I have seen explained online and by Youtubers. Another disadvantage is that in the event of the death of the insured person, the insured person only receives the Death Benefit, not the accumulated money.

＞ ＞ Although there are some differences between the various plans, your understanding of Whole Life Insurance is most likely exactly what you are saying here. You are also correct that you only get the Death Benefit if the insured person dies, since Whole Life Insurance is one of the earliest forms of life insurance with a Permanet （ rather than Term ） or lifetime guarantee. It is unfortunate that the features in this area are different from the current mainstream plans.

Since I have a wife and children, I need a Death Benefit, so I think it would be better to have a Death Benefit of about 100 million yen with Term Life Insurance and invest the other money in ETFs, BOND, SP500, Roth IRAs, Crypto, etc. I think it would be better to invest other money in ETF, BOND, SP500, Roth IRA, Crypto, etc. at this stage.

＞ ＞ It would of course be a good idea to keep your lump sum low with Term Life and invest the rest in ETFs, BOND, SP500, Roth IRA, Crypto, etc. However, depending on your age and the balance between your assets and other assets, exposing all or most of your assets to the stock market in this way may be risky and biased.
Also, Term Life has a very low probability that you will actually die while maintaining the policy and your survivors will receive the insurance benefits （ less than 2% ）. In particular, since many Japanese people live long lives, they are often in good health even when they reach the age where they have no choice but to let go of their insurance because they can no longer afford the premiums. Therefore, it is easy to occur when you do not have insurance when you "really wanted" to have insurance. Term Life is not actually suited to your request to actually leave money to your family.

In fact, among my clients, this type of consultation continues to increase each year.
While everyone's planning changes/modifications are different as a result, depending on the type of life insurance you have, many of you may be able to upgrade your life insurance plan to the current type, increase the growth of your savings program, and possibly add an option for long term care. Many of you have options for long term care.

The current mainstream savings program for life insurance is called Index Universal Life Insurance, or IUL, and it is an index crediting type of interest earning program with an average annualized performance rate of 7-8% over the past 20 years. The average annual percentage rate over the last 20 years has been 7-8%, and in the last 5 years or so, it has been particularly high, with many plans exceeding 10%. It is also possible to structure the plan so that the sum of the guaranteed death benefit and the savings is left to the survivors.

What type of plan you can choose depends on your health and age, but you may want to look into what would happen if you upgraded to a non-dilutive index crediting plan instead of "investing" in the stock market. This may be a good way to make the most of your existing insurance plan without wasting it.

If you are interested in a sample comparison, please let us know, as we are always happy to help with cases like this.