The various life insurance carriers have different niches that they focus their attention on. Some carriers will focus their efforts on being ultra competitive with individuals that are over 50 looking for term insurance. Other carriers, will not be competitive with over 50 and will be mostly focused on competing with individuals in their 20′s and 30′s.
Some of the carriers don’t try and compete with the other companies on the cheapest term rates. These type of carriers may put more of their efforts in having great permanent products. A good example, would be Mass Mutual Life Insurance Company. They are very highly rated with a AAA rating, but are not very competitive with their term insurance rates. On the other hand they have extraordinary financial strength to back up their promise to pay and they have some of the best cash value plans on the market. Their dividend paying whole life insurance is at the top of the industry. If you are looking for a inexpensive term plan than they are the wrong carrier, but if you want great whole life, than they are perfect.
It is important to find a company that is good in the areas that you want for yourself. If financial strength of the company is very important to you, than we are looking at one set of companies. If you want a company that has an A rating or better and want the cheapest term possible, than that is a completely different company. We understand the niches and based upon what you want, we can help you find the right company.
With portfolios down 30 and 40% from a plunging stock market, it is nice to see steady growth in my permanent life insurance policy. The cash value in my dividend paying whole life insurance has a guaranteed interest rate in the cash value and it will never decline in value. While the internal rate of return may not be huge, it is good to know that it is positive every month. I will also receive the value of a dividend if it is declared by the insurance company. Usually good mutual life insurers will declare a dividend. It is not guaranteed, but if you have a policy with Mass Mutual, New York Life, Guardian, etc. they usually declare a nice dividend. A dividend is simply the return of an over collection of premium by the company. They meet their obligations and put enough away in reserves and then declare the dividend back to their policyholders.
On top of my cash value getting better every month, it grows tax deferred. When I access it I can get to it tax free through preferred policy loans. At retirement, I can use the cash value as a supplement to my retirement. First, I will withdraw money from the cash value up to my cost basis, and then use preferred policy loans. It is truly one of the most flexible and best tax shelters available. In fact, Walt Disney got cleaned out in the great depression with all of his stocks and only had his life insurance left. He took a policy loan out of his life policy to start Disneyland.
Like I said, it gets better no matter what.
