Premier Trust Advisors Launch – Guarantees

Not much in life is truly “guaranteed.” We can’t guarantee the weather, what other people will or won’t do, the direction of the markets, or even if we’ll be around to see tomorrow.

And even most “guarantees” have exceptions. Your purchase is guaranteed – but only for 30 days, or unless you drop the item, get it wet, or use it in a way that invalidates the warranty.

However, the one thing I love about Costco is I can return anything at any time and get at minimum a credit for future purchases.  That evergreen tree fit pretty snug in the oversized shopping cart when I returned it.


How about guarantees on where we are putting our money?

Oddly enough, people usually put their money in places with few if any guarantees. And without guarantees, even the most trusted places to store our cash can let us down.

Mortgage bonds, previously thought of as reliable and boring, collapsed in the financial crisis. The housing market followed, with trillions of home equity lost. Muni-bonds, typically another safe haven for money, have been disrupted by bankruptcies. Enormous companies assumed to be stable drivers of the economy such as Enron and WorldCom collapsed with little warning. And the elite brokerage that performed so consistently turned out to be Ponzi scheme.

But there IS a place where your money can provide you true “lifetime guarantees.” Participating whole life insurance from a mutual life insurance company offers guarantees that should not be overlooked… especially if you’re not the type of person who likes to gamble with your dollars!  I hate losing money.

When you buy a whole life policy from a mutual life insurance company, you’re purchasing a financial product known for its guarantees:

  • A guaranteed death benefit. Since death is a “when” and not an “if” event, we think that’s a pretty important guarantee! Term life policies can be useful, especially to young families on a budget, but they are designed to be temporary policies, not permanent life insurance.
  • A guaranteed level premium. Your premium will never go up with whole life insurance. Quotes for term life insurance increase dramatically as you age until they become cost-prohibitive.
  • Guaranteed cash value. Whole life policies have a guaranteed cash value that is net of all costs (mortality costs, company expenses, agent commissions).
  • Guaranteed growth of your cash value. Whole life policies guarantee a minimum interest rate (typically 4%) less the internal costs of the policy.
  • A guarantee of participation in any profits of the mutual company. Profits over and above operating expenses are distributed back to policyholders in the form of dividends. These are not guaranteed, however they have been paid for over 100 years through every economy imaginable.
  • Your ability to borrow against your policy’s cash value is also guaranteed by your policy contract. Typically you can borrow an amount equal to 90 or 95% of your cash value from the insurance company. This can serve as your solid financial foundation to be used for emergencies and opportunities.

To learn more about these and other guarantees with whole life insurance, read:

“Whole Life Guarantees.”

To find out more about the power of whole life insurance when used as a replacement for other cash equivalents, you may wish to read Live Your Life Insurance, a book by my friend and colleague, Kim Butler. It explains how to use whole life insurance strategically so that YOU benefit from your own life insurance.