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Some popular financial talking heads advocate to, rather invest in permanent insurance with a guaranteed death benefit for your whole life, buy “cheap” term insurance, and to invest the rest (that otherwise would have gone to a permanent insurance policy)…

They say the goal is to become “self insured” by the point the term policy would lapse 10/20/30 years down the road, meaning your investments would be able to provide for your family in the event of your “graduation” from life, to a similar degree that a guaranteed death benefit would (tall task!)

Some risks to this thinking…

  Will you actually invest?

Sounds simple, but studies show that many people spend some or all of what ideally should be invested. That’s probably not you, so here are the greater dangers…

  Is your $ guaranteed to grow?

If properly structured & you qualify, a whole life policy, over 10-20+ years, will have a greater cash value than your input (& the growth is accessed tax free!). In the markets, you have no guarantees, and your funds could actually be even, or down later on. But let’s say the market winds blow your way, this is waiting for you…

  If it does grow, the government will be ready to grab their share

Maybe you do better than the whole life would have performed, but now give the government their share, and then you have your actual return. And by the way, you’ve gone into business with a partner who has the ability to change the rules over time – who knows what tax rates will be down the road? Probably not lower than right now. Remember, the growth in a private banking policy is guaranteed, and accessed tax free.

  In a qualified plan, your $ is locked up till age 59.5

What if you have the perfect real estate or investment opportunity at age 50, and your funds are locked up? Being that you’ve gone into business with Wall Street and the Government, you play by their rules. Whole life is also referred to “Infinite Banking” because your options are infinite – access your cash any time for whatever you want! I’m not suggesting a 401K is bad, but it’s not your only option. Why not have a 401K and a private banking / whole life policy? Or have an IRA which is guaranteed TO NEVER LOSE MONEY?!?!

 When the time comes, your life insurance will end

When your term policy ends, you now have no life insurance, and the thousands you’ve paid for the term policy is simply gone. If you had a whole life policy, you could choose to not deposit another dime into it yet be guaranteed a tax free death benefit when you die many years later (while having access to the cash value the whole time for retirement, etc).

A possible nightmare scenario:

Imagine choosing the BTID path, and 20 years later arriving with your investments having done just ok or even being in the negative, and at the same time having your term policy ends, leaving you with NO life insurance. Unfortunately, this nightmare is a reality for all too many people.

You can ensure this won’t happen to you.

Given the dangers of the BTID message, why is it so prevalent? Could there be some folks with a financial interest in that mantra? You bet – there are a few!

My goal is to empower with real, objective facts so that you can make informed decisions that match your core values.