How Investors Can Use Insurance to Reduce Risk
April 18, 2019 by Jeff Brown
INVESTORS HAVE VARIOUS ways to reduce risk – diversification, cash reserves, planning to hang tough through the dips. But experts say it pays to think outside the investing box and consider other tools, like insurance.
“As we amass more assets, we have to protect those assets,” says John Grace, president of Investor’s Advantage Corp. in Westlake Village, California.
Needs change over time, he says, as young investors need to protect children, while older ones must safeguard retirement income and a spouse. So assessing insurance needs is a lifetime project.
Some insurance products are designed for investing. Annuities can provide income just like a portfolio of bonds and dividend-paying stocks, but with less risk. And some permanent life insurance policies like whole and universal life build cash value that can be tapped for emergencies or retirement.