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