Why People are Still Buying Life Insurance
The economic world as we know it has been altered significantly since the recession started in December of 2007. Prior to the stock market’s undoing fueled by a collapsed real estate market, consumers were spending freely and with abandon. Fast forward to 2009 when saving money and cleaning up debt is not only the norm, but is actually considered quite chic. Instead of buying first and thinking later, people are now cautiously evaluating all their expenses and investment strategies thoroughly prior to signing on the dotted line. One such industry that seems to be experiencing a boom is life insurance.
Life insurance (both term and whole) has existed as a way for people to protect their families from financial hardship upon their passing. However, whole term or permanent life insurance is gaining popularity as a current investment tool, as with these types of policies, consumers are provided a constant revenue stream and a sense of security. This type of income is especially important to people nearing retirement age.
Those working towards the retirement goal have decided to change strategies and diversify their financial holdings to include investments in the stock market. However, after consumers watched the crumbling of the stock mark with 40% declines in value, slow and steady interest began looking quite promising. With consistent, tax-deferred returns and an average rate of return exceeding 4%, life insurance has come back into vogue.
Life Insurance Still Going Strong
Although people still are working towards their long term retirement goals, according to Reuters, “… the recession is having an impact on people’s plans as more than one-quarter of the adults (26 percent) surveyed say the effects of today’s economy will cause them to delay their retirement.” Since the recent financial turmoil has weakened the confidence investors have in certain types of investment tools, the monotonous nature of whole term life insurance has now become a new beacon of light especially for those who have retirement goals.
Permanent life insurance as an investment strategy needs to be discussed with an expert as it can be a complicated topic. One of the most important factors to consider is that your money may be tied up for 20 years before you can reap the benefits of your strategy.