Monday, July 14, 2008
Buy Term LOSE the Difference!
While Buy Term invest the difference is great, but it has several flaws. What happens if you outlive the term? What is the cost of insurance after the term period? Can the advisor put in writing the future gains of a mutual fund? If an Advisor says he can GUARANTEE future returns on a mutual fund, then run away! What happens if I want to add MORE money to my IRA on an annual basis? How much do I need to have at retirement? When will I run out of retirement money? Will my 401k/IRA contributions be enough to get me to the goal? How about my estate tax, how much will go to the IRS? Cash value insurance can answer these questions with Authority in spades. Buy Term Invest the difference crusaders can't answer these questions with any authority because they only look at on small aspect of the huge financial planning picture: the cost of insurance. They miss the lost opportunity cost of Triple compounding, Tax-Free Income, Estate Taxes, Increased Premium rates AFTER the Term period on Term Insurance, and the instability and inherent risk of Investing in Mutual Funds. They get you focused on the Insurance Agent's "GREED" instead of focusing on the greed of the IRS, Brokerage Houses, and the people who promote these simpleton concepts. Buy Term invest the difference crusade was excellent in the 70s, but it is over. There are TOO many excellent products and concepts to locked into just this ONE financial plan. Buy Term invest the difference is a EXCELLENT starting point, but I would not want to finish there.