Can a Life Insurance Policy be Used as an Investment?
Yes, a life insurance policy can be used as an investment when it’s a whole or permanent life insurance policy. These are generally 4 to 5 times more expensive that a term life insurance policy which holds no cash value. Generally, experts, like AccuQuote Life Insurance, recommend buying term life insurance and investing in instruments that would yield more return on your investment than a whole life policy.
In general the answer to this questions is no. While permanent life policies do build cash value, they do it a greatly reduced rate of return when compared to other traditional investment vehicles. Because much of the premium is going toward life insurance expenses and not strictly to cash value, a life insurance policy grows much more slowly than a moderately performing mutual fund or aggressive growth fund. However, a permanent life insurance policy is a safe and reliable savings vehicle, as most carrier offer a minimum guaranteed return.
