Some people say Dallas life insurance is for young people who need to make sure their young families are provided for is they should die unexpectedly. Others say life insurance is for older people who want to leave something for their families. However, not as many people see life insurance as an actual form of investment.

These days, government bonds are returning extremely low returns, with interest rates plummeting. Some of the top financial advisers, therefore, have started advising their clients to consider whole life insurance. Whole life insurance is the permanent kind that doesn’t expire after a set term. There are 3 good reasons to consider a whole life policy as opposed to government bonds in your investment portfolio.

One excellent reason to invest in a whole or permanent life policy is the rate of return. Right now, you would lock in between 3% and 5% return on your money. Government bonds are bringing in about ½ of that.

In addition, the money in your whole life policy will pass on to your beneficiaries free of taxes. This type of benefit is not tapped by income taxes.

And finally, if you need to borrow against your whole life insurance policy, you can do it tax free. This is a big plus in many people’s minds. If you don’t pay back the loan, the insurance company will just deduct the amount from your death benefits.

Critics of this advice point out the fees that accompany any insurance policy. The consensus of most of the critics is that the years of fees for administering the plan, coupled with the decreased gains if you live longer than you expected, doesn’t make good investing sense.

Still, the volatile stock market and poorly performing Treasury bonds don’t show any promise of improvement in the near future, while the Dallas life insurance policies continue to steadily proceed, producing steady returns.

Even others, even some in the insurance industry, are not enthusiastic about moving life insurance into the “assets” class of investments. They believe that life insurance should be, simply, insurance. When you remove money from insurance, you no longer have that insurance. This can have some serious effects on the entire reason you bought life insurance in the first place.

One way to use a whole life policy as a wealth builder is to participate in a practice called “overfunding”. This is when you buy an insurance policy, and pay more than your premium every month. Some people even make a huge, lump sum deposit into the account. When you do this, your money starts earning the steady interest rate from the beginning. Given a 15 to 20 year time period, it pays off quite well. As one investment advisor said, it’s a pretty good idea to have a 5% tool “in your investment box”.

However, Dallas life insurance companies recommend that you check to make sure the policy yield a set return rate, rather than a floating one, if you’re counting on it as an investment.