For this example, we have done an illustration for 5 year old Zach.
Monthly investment = $160.16
Life insurance coverage = $150,000
You will continue to make this investment every month for 20 years. After 20 years, the policy is completely PAID UP in full and there is no premium to be paid ever again for the rest of Zach's life.
After 20 years
When Zach is 25, you will have invested a total of $38,438.
Based on the current dividend scale, the Cash Value inside the policy would be $47,918 and the death benefit would have doubled to $307,744.
The purpose of this policy is to keep it long term, however, at this point if you were to cancel it, you would be able to give Zach $47,918 in cash which could be used in any way he needed (for a down-payment, for university, to travel, or anything) the money would be his.
The best part of this investment is that it continues to grow INDEFINITELY.
And of course the bonus is that he now has $300,000 of life insurance in case anything happens, guaranteed no matter what his health situation looks like.
After 30 years
When Zach is 35, you will have invested a total of $38,438 (this has not changed, it is your original investment from the first 20 years). Based on the current dividend scale, the Cash Value inside the policy would now be $97,123 and the death benefit would have grown even more to $477,531.
You can see how the numbers are continuing to grow over this 10 year period with no further investment.
After 60 years
When Zach is 65, you will have invested a total of $38,438 (again this has not changed from the original investment).
Based on the current dividend scale, the Cash Value inside the policy would be $541,648 and the death benefit would have grown to $1,054,246 reaching the Million Dollar mark.
Think of this as though you have bought a house for Zach with a monthly mortgage payment of $160. After 20 years the mortgage is paid off and Zach owns the house. At any time Zach can sell the house and cash out but the longer he keeps it the more it will be worth. Also at any time, Zach can borrow against the value of the house and use it as an asset for leverage. The same thing can be done with his life insurance policy. It is an asset that he can use to borrow against, cash out, or keep in place until the end of his life to pass down to his own children.
If Zach makes it to age 90 he could pass down $1.8 Million dollars to his children (your grandchildren).
Positive growth, no negative returns or stock market fluctuation
The growth of your investment (the cash value and the death benefit) is NOT based on the stock market. It is based on the profitability of the insurance company you are with (in this example we used an illustration from Equitable Life). The growth is based on the Dividends issued by the company. There will never be negative growth, there could be zero growth in a year, but it will never decrease in value.
If this is something you are interested in, please give us a call:
Desiree 778 245 2262