Life Insurance Policy as Part of Investment Strategy

Can you live your life without a life insurance policy? Sure. You can be very successful, make lots of money and never hold a single life insurance policy. It’s all a matter of conviction and beliefs. When you’re young, you feel invincible. You start your career path, your future is bright. At this point it is the best time to create a solid investment strategy. This strategy should be foolproof, meaning it should include all contingencies.

The Pillars of Proper Investment Strategy

Whether you see it as an immediate necessity or not, there are the a good investment strategy must have multiple pillars. The first thing that everyone will provide you with as you enter the job market is a retirement fund.


Most commonly used is the 401K. There is no reason why you must have one. It is useless to you when you’re in your twenties. You have no benefit from the money you put into it. So, why do you put it there? Because either your employer, or you, know that investment is a long term project. Besides building a pension fund, the 401K money is also money that you can tap into in case of emergencies. It is not a good idea to look at a 401K as a savings account, but that’s an entirely different topic altogether.


This is a very good long term pillar. There are several ways to approach stock trading, where the longer the investment plan is, the safer. We already discussed day trading here. That’s statistically one of the worst strategies there is. You can follow certain companies and news around them and jump in on the investment when the stock market dips. Whatever the reason for the dip, this strategy allows you to make money within a few months time. This strategy requires that you have pile of cash readily available. In long term perspective, investing in solid mutual funds or solid global corporations are a safe way to go. Just do structure your portfolio well. Don’t put all your eggs into one basket.

Real Estate

Always a solid long term pillar. Speculative real estate investments require lot of knowledge and cash. Unless you are a wealthy real estate expert, this investment is not for you. However, you can still invest into real estate. The best way for you is through primary residence. As expensive as a mortgage is, it’s still a good tool to save money when compared to paying rent. But, beware of the expenses. Taking a mortgage for a period of less than 10 years is not profitable. Before purchasing a primary residence, it makes sense to first rent in an area you are looking into moving. After a year or two, you’ll have a better idea of what suits you best there.

Half way through your mortgage term, you’ll see equity in your real estate pile up. Good inflation rate will help you accumulate value. Issue with value in real estate is that it’s not rapidly liquid. To get any cash value out of your home means you have to sell it. And sale of a home cant take months, eve once you sign a sales contract.

Life Insurance Policy

There are a few options here and it depends on your needs. This is why you should always discuss your situation with a life insurance broker. A well positioned life insurance policy can be used to protect your investment pillars (term life policy), or it can actually do two things at once. It can protect and also become another pillar (whole life policy). Let’s take a look at some options available to you.

Utilizing a Life Insurance Policy In Your Investment Strategy

As we said at the beginning. You can go your entire life, be successful and not ever have a life insurance policy. Is it smart? No. And that’s what it’s about. Being smart and setting up a foolproof plan. A good policy is the key to a foolproof plan.

Term Life Policy

Great way to protect your non-liquid assets. Especially for people under the age of 40. When you are still at the start of your mortgage term, this policy type is a great way to protect your primary real estate mortgage. Of course, it is protection for the contingency, where you die. Is it going to happen? We all hope not. Can it happen? Yes. And we’re discussing a foolproof plan. Thus this is something to take into consideration. To help you save money you can use a decreasing term life insurance. This type can be set up to decrease the policy value as your mortgage principal lowers. You can also use term policy to protect balances on your credit cards and other loans.

Term Life Policies are straight protection. They have no cash values. Money is paid out only once you die. Once their term passes, coverage ends. One of their perks are conversions. When you’re young, you can secure a lot of coverage for a very low price. As you get older, you can lose your insurability for various reasons. If you’re holding an active term policy, you can convert it to a whole life policy and make your coverage permanent.

Whole Life Policy

This type is a permanent life insurance. It offers death benefit from day one, but also builds cash value over time. It is a life insurance policy, which helps you protect your assets. And also a long term investment tool with excellent liquidity. Your money grows tax deferred and it can be available to you in a matter of days tax free. Why tax free? Because you don’t liquidate the policy, you only take a loan against its cash value. Your face value is not impacted. The a.p.r. is a few points, which gives you the opportunity to invest the money and pay it back at your discretion. Current stock market dip is the perfect example. You buy a portfolio at a discount and in a matter of months you can double your money at minimum costs.

How To Get Started

If you’ve setup your pillars and are looking to secure your investments, then it’s time to start a conversation. How to do it? Simply fill out this form and let us get back to you and discuss the best options. We’re looking forward to working with you..

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