Have you ever eaten a Shreddie? It’s a breakfast cereal made of wheat. Here in the United States, we would refer to it as Post’s Shredded Wheat, but in the United Kingdom, they refer to them as Shreddies.
Now, the amazing thing about this particular cereal, it’s relatively boring. There has been nothing new added to it for probably 100 years, but somehow it is still enjoyed by millions. How do you make it new and interesting for a brand-new generation? Perhaps you take the old version and just add a little twist. If you go from a Shreddie square to a diamond, all of a sudden you have a brand new Shreddie.
This worked so well in fact that when they made this advertising campaign, their sales went up exponentially. People forgot how wonderful this plain breakfast cereal was.
The reason I’m talking about this today is because one of the oldest products in the United States is whole life insurance. In fact, it existed before the United States, before the dawn of our country. Because of its name, you know that this insurance will last the whole of your life instead of a term that lasts 10, 15, or 20 years and then oftentimes dies before the individual dies. Instead, whole life is a contractual agreement that the insurance company will keep this policy in force until you are 121 years old. That can be magical because you know you have a guaranteed benefit that will be paid to the people you love at exactly the time that it's needed. It opens up a brand-new world of possibilities.
It means that you don't have to die with all of your money. You can spend all your money while you’re alive and enjoy life if you want. You can give money to the people, organizations, and groups that you believe in and are most passionate about. Wouldn't you rather have the opportunity to see the benefits of your good works as opposed to them receiving your money from your cold, dead hands? Wouldn't it be wonderful if you could live life more fully and intentionally as opposed to living life with a scarcity mindset?
A scarcity mindset means you are constantly worried about having enough money to survive and worried about what happens if you don’t. A permanent whole life insurance policy alleviates those worries because it recreates all the money that you (possibly frivolously) spent during your lifetime. Perhaps you spent your money on helping people, loving people, or perhaps providing a safety net for people who didn't have a safety net for themselves. Whatever that looks like, during your journey of life, you were able to place money away, tax-deferred in many cases. If done correctly, possibly tax-free.
Permanent whole life insurance also gives you the ability to take advantage of opportunities in your life. You would have money available to take advantage of an opportunity that comes your way, and you would also have an emergency fund. So, you wouldn't have sleepless nights wondering what happens if something bad happens. It's literally like having money on deposit, which you do through your insurance company through the premiums that you paid. Especially in cases of overfunding your life insurance policy. Overfunding means you’re putting in more money than what is required. If you are overfunding a life insurance policy, that means that there is more money that is with the insurance company receiving a conservative rate of return that will be there when needed, whether an opportunity comes your way or whether there is an emergency.
This is a product that’s been around for hundreds of years. It’s not sexy. It doesn’t have these unbelievable rates of return that you may have one day and then another you wonder if you’re going to have anything at all. It is the financial foundation of everything else that you do. It’s not the only part of a financial plan. We all need several parts to our financial plans, but it is the one thing that you can count on. If you have a waiver of premium benefit, it guarantees that if you become disabled the insurance company will continue to not only keep the insurance in place, but they will also make sure that the money that you would have put into the policy continues. The premiums start coming from them as opposed to you. Does that happen with a 401K? No. Does that happen with an IRA? No.
So, let’s look at the old product. In this case, the Shreddie. It’s boring and square. Let’s you and I get together and look at it from a slightly different angle. The square could very well be a diamond in disguise. If you are interested in having a more in-depth discussion, we are easy to find. You can find my book on Amazon, Barnes and Noble, iTunes, Audible, or our website. Have a wonderful day and think outside of the square. Think instead of the diamond.
