Most persons when questioned about life insurance reply that it only benefits those left behind. The truth is that it can also benefit the policyholder more than an average savings plan. Unlike a savings plan, that needs time to grow, the life insurance benefit grows independent of time as it creates an immediate estate. How so?

1. What You Don’t Know May You
Compiled by: Reginald Michael Alleyne

2. • If John Doe, aged 30, wanted to save $1M for his dependents till
the presumed age of death @ 85 he would need to save
$1,150/month at a financial institution giving him a compound
interest rate of 2% per annum.
• If he reserved this using insurance it would cost him $800/month,
$350 less. A total savings in 55 years of $231,000!
Life Insurance as a Savings Investment?

3. Life Insurance as a Savings Investment?
• If he died @ 85 he would receive not only $1M as a pay out from
the insurance but also an additional $800K in client accumulation
at death leaving a total of $1.8M behind for his dependents.
• If he had to accumulate $1.8M at the financial institute offering 2%
compounded interest yearly, he would need to save $2,050 which
is 2.5 times the monthly premium he would have paid to the
insurance company

4. Life Insurance as a Savings Investment?
• What if Joe did not die @ 85? Then he would receive $1M in cash
based on the amount of money accumulated under his policy!!!
• In effect he would have also saved $231,000 because of not
investing it into the financial institution giving him the yearly 2%
compound interest
• What though if John Doe decided at a retirement age of 65 he
didn't want to continue his insurance as an investment for his
dependents?

5. Life Insurance as a Savings Investment?
• When he surrenders his insurance @ 65 he would receive
$431,000 in cash which is equal to all his premiums paid up to that
time $336,00 ($800x12x35) and an additional $100,000 in cash!
• If he did the same with the financial institute @ 65 he would get
back all his deposits and $95,000 in cash savings but he would
have paid $483,000 ($1,150x12x35) in deposits which is $147,000
more than through the insurance, to get the same amount of
cash
• Note: In the above analysis we have not considered if John Doe passes prematurely. Which
prematurely. Which makes life insurance that much better an investment as the sum
the sum assured of $1M is available to the dependents even if death occurs within a month
within a month of putting the policy in force. No investment does that!

6. If you would like to discuss in more detail any of
the preceding topics I can be contacted as follows:
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†By Email at: rmalleyn1@gmail.com
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