Permanent life insurance can work like bonds for investors who've maxed retirement accounts, but should stay small since it returns 4-4.5% versus 7-9% in stocks. Sophisticated investors might use it as accessible cash, but allocating heavily to insurance means leaving money on the table over decades.
the typical person that's able to save and invest, I think permanent life insurance could be a bond alternative. And when set up and used properly, I would, I would make it a better bond. So even for a typical person who's maxing out their 401 and other things, I think I could make the argument that permanent life insurance could be a bond alternative. But meaning in your bond, you're not going to have 50/50 or 60/40 bonds. Like it's going to be a somewhat smaller portion and you're going to get majority of equities. So I think for a typical person, that would be almost where I would go. And then for the more sophisticated person, I would look at life insurance not just as a bond alternative, but maybe as a place to storehouse cash and be able to utilize. I would love to hear Jim's take on that, but I very much would not endorse someone putting all their money into any type of insurance product because the opportunity cost of only earning 4, 4.5% versus, you know, 7 to 9% is, is large over your lifetime.
