Life insurance in a low interest rate environment
September 15, 2016 by Myra Thomas
Low interest rates might be good for homebuyers, but that just isn’t the case for the average investor. Returns on vehicles like certificates of deposit (CDs) are meager at best, and they require people to lock up their money for a long time, reducing liquidity. Early withdrawal penalties make CDs an even less attractive investment. Conventional savings accounts and interest-bearing checking accounts are earning low yields, as well.
Your current and prospective clients may not be financial experts, but they do know what low interest rates mean to them – and will be looking for advice on where to put their money to work hard for them. Life insurance can be a smart way to do just that, but as the advisor, you’ll need to explain its value. A safe bet, life insurance can perform much better than traditional products in a low-interest-rate environment. And they have the added bonus of a death benefit.
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