Commonly marketed as a Life Insurance Retirement Plan, it's important to know that using life insurance as an investment strategy can have severe drawbacks. In these plans, a substantial amount of your client's premiums are usually applied toward policy fees, the cost of insurance, and commissions. Essentially, it can take time for the savings account to start gaining value, especially for people in their fifties or sixties.
Likewise, annuities, specifically indexed annuities, need to be structured correctly with proper products and insurance companies for them to have performance and keep pace with fixed annuities. Even though some might have expensive fees, comparatively they are less expensive overall when compared to life insurance.
While both should be considered in your client's long-term financial plan, it's imperative to understand the differences and how each might play a role.
Founder and Managing Partner
Carlos Dias Jr. is a financial adviser, public speaker, and president of Dias Wealth LLC in Orlando, Florida, offering strategic financial planning services to business owners, executives, retirees, and professional athletes.
Carlos is a nationally syndicated columnist for Kiplinger and has contributed, been featured, or quoted in over 100 publications, including Forbes, MarketWatch, Bloomberg, CNBC, The Wall Street Journal, U.S. News & World Report, USA Today, and several others. He's also been interviewed on various radio and television stations. Carlos is trilingual, fluent in both Portuguese and Spanish.