One of the best ways to choose something to invest in is to have a bank or trust do it for you. They’re just about guaranteed to be connected to legitimate investment opportunities. Perhaps the most efficient way to invest is to do it through life insurance. That way you’re not only investing, but accumulating money for your family and loved ones as well.
There are several kinds of life insurance, including: whole, universal and variable. Whole life insurance gives you the least payback and is fairly expensive, so if you’re looking into life insurance for investment purposes, try another type. Universal life insurance is a nice option because you can choose whether or not to invest on the side, and it’s lifelong life insurance coverage. This is important, because if you purchase term life insurance and outlive the time it’s supposed to last, it will cancel out. You’ll get nothing out of all the money you put toward it. So lifelong life insurance is really the way to go.
Universal life insurance allows you to either: a) invest and put the money from that into your overall life insurance, or b) get a periodic payback from the investment to spend throughout your lifetime.
As useful as universal life insurance is, variable is almost certainly the best for investment purposes. Not only does it allow you to invest, but you can invest into multiple things of your choice. You ought to be provided with a list of businesses, stocks or whatever else and then pick as many as you like. That way you choose how much you pay (based off of how many you invest into) and what it goes toward. It really allows you the most control and can potentially provide you with the most payback. Like universal health insurance, this payback can be used either for yourself or your loved ones. Your choice.
If you already have a life insurance plan and would prefer to stick with it, following are a few basic tips to help you know how to avoid bad investments traps:
• Investments with surrender charges are probably not the best choice. They limit your flexibility and that’s never a good thing, especially when it comes to your money and assets. For instance, if you divorce and you’ve been into investments with surrender charges, you will have to pay high amounts to get out of the joint account. Either that or wait several years for it to time out on its own. Neither option seems very appealing, does it? This is just a basic rule of course. If you are single, not planning on moving (at least not until you can without being slapped with surrender charges) and in good health you may still be able to use an investment with surrender charges to your benefit.
• Illiquid investments could be a red flag. Often offering higher returns, their downfall is that you can’t cash those returns in very easily. Sometimes it may seem like you aren’t being offered higher returns after all. It’s a sticky situation to be sure, and unless you’re sure you can navigate it effectively you may want to look elsewhere.
Investments that pay upfront commissions are almost definitely to be avoided. Once your investment is in place, your advisor no longer has incentive to continue providing service to you. In a nutshell, it’s rather pointless and could all too easily bite you in the butt. An exception would be real estate, since in real estate your advisor doesn’t need to provide you continuing service anyway. It’s pretty easy to know how to avoid bad investments. Just go about whatever you do with proper education on the matter at hand.