Life Insurance Investment

Life insurance can be one of the best investments you make when it comes to your family’s financial security.

Many Australians try to put aside some money on a regular basis to save for a rainy day.  That rainy day may come due a major injury or illness, or in the worst case the death of a family member.

Putting aside $5 or even $10 per day won’t be too much of a stretch for many Australian families, and a lot of people spend close to this on their daily coffee and lunch.  Saving this amount is a great start, but is it enough?

Over a lifetime of saving this would turn into a very handy lump sum, but what if your rainy day came sooner?  What if it came next week or even tomorrow?  Would there be sufficient savings to get you and your family through this period?

Instead of storing that money in a savings account and hoping that your rainy day is many years away, a better option may be to invest it into life insurance premiums, along with associated covers such as income protection, TPD and trauma insurance.

By investing in a quality life insurance package, you can ensure that the financial security of your family will be taken care of regardless of when that rainy day arrives.

Life insurance with an investment component

Many years ago life insurance policies actually included a cash investment portion which grew as the years passed by.  These types of policies where generally known as ‘whole of life’ insurance.

The investment component could be cashed in at any time, and in some cases you could even borrow against this portion of your life insurance policy.

These types of policies were phased out in Australia many years ago, but that doesn’t mean you can’t treat your current life insurance policy as an investment in your family’s financial security.

Other ways life insurance can be considered an investment

Many Australians like the idea of leaving their children and loved ones with a meaningful inheritance to help them along in life.

For some people who have invested wisely over their lives, they will be able to leave a sizable estate.  But the reality for many people is that their assets have had to be sold over the years to fund their retirement.

If you wish to leave an inheritance but don’t have sufficient assets, a life insurance policy can provide a significant boost to your estate and give your loves ones a sizeable inheritance in line with your wishes.

Depending on how your life insurance proceeds are paid out to your beneficiaries, they may be able to receive the funds tax free.  You should consult an estate planning professional for further advice regarding this.

Is life insurance really an investment?

Technically it would be incorrect to class life insurance as an investment, but as we can see there are many ways in which a suitable life insurance package can provide some of the same benefits that an investment can.