I'm going to get crushed on this post...... I used to believe in permanent life insurance. But now, in most cases, I do NOT. The industry promotes its benefits: ? You can borrow against the cash value without triggering capital gains or taxes. (I can achieve the same with a securities-backed line of credit—often with better arbitrage opportunities.) ? It’s a form of forced savings. (I establish structured investment plans for my clients that provide flexibility and control.) ? You should have 1–3 years in cash equivalents at retirement. (I agree with this principle, but I use more efficient strategies to achieve it.) I know saving requires discipline but if you must be forced to save, that’s not a promising financial strategy. And the reality is, many of these policies are sold by big insurance companies and agents who push life insurance into every so-called “financial plan.” Yes, there are legitimate uses for permanent life insurance in business and estate planning. But for the upper middle class, lower upper class, and especially the middle class, it’s often unnecessary. There are more efficient ways to grow and protect wealth. As a CFP?, I have a responsibility to get the word out. Being a true fiduciary does not mean promoting permanent life insurance. Years ago, I dropped my life insurance license and no longer offer it but recommend term when life insurance is needed, typically term because I believe in large-term policies for families and businesses who need liquidity if something happens. The key to proper planning isn’t tying up money in expensive policies. It’s ensuring clients have one to two years of investment income in safe, cash-like investments, having flexibility, VISION and written financial plan. As an industry, we must push back against the narrative that every financial plan needs permanent life insurance. Because real financial planning is about what’s best for the CLIENT—not what pays the highest commission. #FinancialPlanning #WealthManagement #LifeInsurance #Fiduciary #Investing
