Participating life insurance

For years, we have heard financial sayings such as: “Don’t put all your eggs in one basket”, “buy low, sell high” and “timing is everything”. All of this remains true, but investors today face new challenges, such as interest rates that fluctuate in line with inflation and frequent market turbulence. Despite current trends, Markowitz’s theory that traditional portfolio development is based on the correlation between risk and asset return is still relevant. In addition, diversification remains an excellent way to develop efficient financial planning. Efficiency reduces overall risk. But these are not the only strategies that can reduce portfolio risk and optimize expected returns.

A strategy involving integrating a permanent life insurance policy into your financial planning can also be considered in order to improve diversification, while offering an attractive after-tax rate of return. The opportunities offered by permanent life insurance products go beyond traditional insurance needs.

In this modern strategy, life insurance not only meets the need for protection, but also diversifies financial assets during the insured’s lifetime and at death. In addition, insurance cash surrender values can serve as a source of liquidity and allow for additional strategies if the need arises. For example, you can access the cash value in several ways: a policy loan, partial surrender or secured loan.

Who is the "Insurance-As-An-Asset-Class" Strategy for?

This strategy is geared towards businesses and individuals with ongoing life insurance needs, who have excess income or assets that are not needed in the short term to finance their activities, lifestyle or retirement.

It is important to create winning conditions to maximize the strategy,  such as predictable cash flows in order to pay insurance premiums.