Accelerate Your Personal Savings
Alright, you’ve come to realize how important a personal savings account is. However, we all know how difficult it can be to find extra money to set aside. But we have a solution. We help clients find money by simply reallocating dollars by redesigning life insurance policies.
Some people are over insured, this is a place we find money. Some people are wasting money with term insurance, this is another place we find money to build your personal savings. But before we begin to explain how, let us talk about a generally recognized savings goal.
Your Personal Savings Goal
We believe as many other financial planners and industry professionals do, that we all should have at least a 6 month personal savings. That is to say if your net monthly living expenses run 4,000 a month you should have personal savings amount of 24,000. But before you say that’s impossible, we can show you how to accelerate your personal savings. Of course it is going to take commitment on your part. But it’s worth it because you are going to love the peace of mind this brings and ultimately this new habit will help you build financial freedom.
Reaching Your Personal Savings Goal
A very common way we can find your savings after you have created a budget, is to reallocate what you are spending on your term life insurance. You probably are not aware of the fact that insurance insiders say 95% of term policies never fund. This means there is a great deal of money wasted – let’s say a 30 year old pays 45.00 a month on 700,000 of term insurance for 20 years.. That total is 10,800.00 paid out on premiums and at the end of the 20 years you have nothing. So typically your 50 now and you get another 20 year term and the premium is now 70.00 which equals another 16,800.00 and now your 70 and your looking at buying final expense insurance and it costs a fortune.
The solution is to design a life insurance policy with cash value and annual dividends for close to the amount of money you are paying for your term. On top of that you place your extra savings money in what is called paid-up-additions and in no time you have your life insurance and your 24,000.00 in cash value. Not to mention this strategy is saving you a lot of money in the long run because you are not running out in 40 years attempting to get more insurance.
You’ve Reached Your Savings Goal Now What?
At this point your excited! Now you have your emergency savings account, it’s growing with the insurance company guaranteed growth oh and all this growth is tax-free.
Now you create your “Dream Account” or as I call it your “Opportunity Fund” this is another life insurance policy structured differently from the above mentioned policy. Oh, and don’t worry you are no longer putting premiums into the above mentioned policy unless you want to. Now this *policy becomes your “dream account ” your long term savings which is growing at a guaranteed rate tax-free along with a loan provision allowing you to use your earned cash value as collateral to access funds to make your dreams come true. Maybe you are buying a business, rental properties, your house in….you fill in the blanks. You’ll find the people that use this type of smart/safe money financial strategy really win.
*Every person and financial goals are unique and so is the design of these types of life insurance policies.