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Vivinavi Los Angeles
Is life insurance a good investment?

Question
#1
  • 教えて下さい。
  • mail
  • 2022/01/11 10:12

Until recently, I have been living paycheck to paycheck, so I have not invested much in the way of investments. I started a side business last year that allows me to earn a steady income every month, so I am now studying to invest my surplus money.

The quickest investment I could think of was life insurance.

However, I am somewhat skeptical about life insurance because I strongly remember advice I heard from someone about 10 years ago that life insurance and investments should not be mixed, and that life insurance is not an investment.

I have seen online and Youtuber's explanations that Whole life insurance has a real annual interest rate of about 1.5-2% after deducting commissions and expenses, as the premium in the monthly amount you pay increases with age and the amount going to investments decreases as you get closer to maturity. Another disadvantage is that in the event of the death of the insured person, the insured person only receives the Death Benefit, not the accumulated money.

I have a wife and children, so I need the Death Benefit, so I think it would be better to have a Death Benefit of about 100 million yen in Term Life Insurance and invest the other money in ETFs, BOND, SP500, Roth IRAs, Crypto, etc. I think it is better to invest other money in ETF, BOND, SP500, Roth IRA, Crypto, etc. at this stage.

Is life insurance a good investment, although each individual is different depending on family circumstances and income?
Please let me know.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#3
  • pooske
  • 2022/01/22 (Sat) 22:30
  • Report

Life insurance is not an investment. If you do not die, there is no virtue in it. If you live a short life, it will be difficult to leave enough money for your family. Also, after you die, there is nothing more you can do, even if you have 100 million yen, it will not be enough.

Buy stocks of companies you like. For example, if you like Costco, buy Costco stock. If you like Apple products, buy Apple stock. And if the price goes down, be patient. On the other hand, if the price goes down, have the courage to buy. However, this is a 10-year investment. It will not work in the short term.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#4

It is me, but I am a financial consultant. Current life insurance can be an investment. I will first listen to the whole picture and your wishes before advising you. I offer free consultations. Please contact me if you would like to know more.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#5

In my layman's personal opinion, the purpose of life insurance is to replace the income of the deceased insured to support the remaining family members. A common practice would be to purchase Term Life Insurance at 10-15 times the annual income until the children are no longer dependent on the insured or until the insured himself retires. For example, if the mainstay of the family $ 100k annual income dies, $ 1.5M of insurance money can be invested in S&P500 Index Fund, etc., and on average （ based on historical data only, ） $ 100k or so annual income will be earned. 100k per annum based on historical data. On the other hand, if you already have $ 1.5M in financial assets, you are Self Insured and do not need to buy life insurance. Also, when your children leave the nest after getting a job or your spouse reaches pensionable age, you will no longer need life insurance because you will need less money. Insurance is just insurance. Term Life Insurance is a good choice for a lump sum. Besides, Term Life Insurance is much cheaper in terms of monthly premiums. And it is recommended to separately invest the surplus funds in index funds with low fees for long-term investment by yourself.

You may already know this, but check out Dave Ramsey's channel on Youtube. He talks a lot about insurance and long-term investing, has podcasts, and has a best-selling book out.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#6
  • トホホのおとっつぁん
  • 2022/05/30 (Mon) 00:59
  • Report

Shut up and keep piling into the S&P500 ETF VOO.
You can find out more on YouTube.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

#7
  • 昭和のおとっつぁん
  • 2022/05/30 (Mon) 07:05
  • Report

It is up to the individual to decide where to invest.
There is no need to tell a stranger what to do.

Life insurance should teach you about good investments.

This text has been translated by auto-translation. There may be a slight difference between the original text and the translation. (Original Language: 日本語)

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