Life insurance: also an alternative for your safe money Do you realize that a possible safe haven for your serious money, may be found in the life insurance industry? Have you heard people saying, “I know I need to save and invest…but I just don’t want to LOSE anything!” review of financial experts of the world the basic four “homes” for your money. You can place your money for long-term savings, such as planning for retirement or your kid’s college education in these general financial categories: Banks Stock Market Real Estate Life Insurance Searching from real estate investor and a business and estate planning attorney. With hindsight being 20/20 and what has happened in the market. After listening to these several points, which industry do you think has felt less of an economic impact and has resulted in more predictability and to some extent, safety for your money? The life insurance industry should no longer be something you think about for when someone only dies…but rather for someone who wants to live for very long time. life insurance is the only financial tool that can grow your money tax-deferred, be accessed tax-free (via loan/withdrawal) and blossoms in value tax-free at your death to the people you designate as your beneficiary while bypassing a lengthy probate court process…compare THAT to a mutual fund, piece of real estate or a bank account. No big investment. For buying real estate, fixed deposits, buying shares or stocks, gold or bullions, etc. one needs a huge amount to be paid full in advance. For example, if a land’s value becomes double in 5-10 years, the buyer has to pay a huge amount in advance. The profit ratio in the insurance is same but it comes at the end of the maturity period. The difference is that the land cannot be purchased without full payment in advance while the insurance benefits can be gained without any huge investment to begin with. Reduced Premium Payment Due to Inflation. There is another side to the coin of how inflation affects term life insurance. The premium you pay per month for life insurance today will in terms be the same, but will feel like less money ten years from now due to the devaluation of the dollar resulting from inflation. So if you are paying 10,000 per month for a Rs.2000,000 Sum Assured policy today that Rs. 10,000 may only feel like Rs.5000 ten years from now. Therefore if you find the best life insurance rate today that rate will feel even lower in each subsequent year. INFLATION AND RISK IN VARIOUS INVESTMENTS Investments in prize bonds. Gold, silver, diferent commercial banks, , defence saving certificate, real estate (with huge money) gives unexpected result and also (in tax bracket ) mostly you get the profit in the shape of inflation, nothihing in your hand. Also someone lose their capitals in stock market, mutual funds, real estate, commodities. you will have longer time horizon or sufficient assets to accomodate the increased risks. Tax relief Tax evasion is a crime against the nation but the people in the subcontinent are involved so deep in this crime that they hire professional lawyers and chartered accountants who are experts in leading them in this crime. The past record also shows that some personnel of the tax departments were also involved in showing the tricky ways and means to evade paying taxes. Through life insurance, one can benefit the country and save the income tax without committing any illegality as most of the policies are tax exempted or tax is rebated. Money when you need it In the property dealings there are always dangers of litigation, arbitration, collection of money in legal way etc., but in life insurance one is safe from all these obstacles. Financial experts says inflation is the tax code. It completely ignores inflation when calculating capital gains. If I own a stock for several years, and its nominal price doubles, but inflation causes prices to double in that same period, I have no gain, but I am taxed as if I had one. This is actually one good argument for having a lower rate on long term gains, but it would be better if they just indexed the gains for inflation.
Posted on: Wed, 10 Jul 2013 09:49:03 +0000
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