NAILBA Perspectives Fall 2020 | Page 32

LIFE INSURANCE AWARENESS Value of life insurance during a pandemic It is times like these that we are reminded of our mortality, but most of us will not die from Covid-19. There are many ways we can die, but the most important thing is to be sure your life insurance policy is in-force on the day you die no matter the cause of your death, which eventually means having a permanent life policy. But the real lesson during these challenging times goes much deeper than just a tax-free death benefit. This pandemic has shined a light on the living benefits of a dividend-paying permanent whole life policy. Cash is king When the Wall Street markets fell a few months ago, the cash value in those life policies sailed right through it all with uninterrupted growth. Having access to that cash tax-free in the form of policy loans is what saved many people, and it allowed them to give any money they did have in the markets time to recover. We have all heard the phrase “Cash is King,” but cash value is even more powerful than cash when you understand the power of using that cash value as collateral while taking policy loans. Sean Quigley is a financial industry speaker and author of “The Cash Play — Capitalizing on the Opportunity Value of Cash.” He’s a Court of the Table MDRT member, and recently received Gama International’s Silver Front Line Leader Award. [email protected] Seeing it in action Before selling my business of 19 years and transitioning into the financial services industry, I saw the importance of having liquidity in my business and in a personal portfolio to protect against any kind of economic downturn or unforeseen circumstance. A plan must work in all circumstances, and not simply perfect circumstances. This year alone, the government stimulus will increase our country’s national debt by over four trillion dollars, so tax rates will inevitably go up in the future. Therefore, planning accordingly and gradually moving hardearned money out of taxable buckets and into the tax-free bucket can make good sense. This pandemic, and the economic challenges associated with it, will forever change the way we invest. Every move we make must be to protect and preserve principal, and a whole life policy can become the most integral part of a portfolio. If designed properly, and by taking advantage of the ability to max-fund the policy within the MEC limits, it will have built an immensely powerful tax-free personal bank of cash. As the old saying says, there are only two things certain in life — death and taxes. It is critical to plan the best financial outcome in both areas. 32 Perspectives Q3 2020